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ALSO A Deal is a Deal? PLUS Dealer Profiles

LEGAL MINUTE: THE PROS AND CONS OF ARBITRATION

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

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WEST COASTDEALER

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 O F C A L I F O R N I A

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IADAC’s 43rd Annual Conventionwill take place Oct. 7 & 8 at the Gold Country Casino in California.FOR MORE INFORMATION AND TO REGISTER,SEE PAGES 32-33 OR VISIT IADAC.ORG.

SEE YOU THERE!

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ADVERTISERSINDEXAction Auto Recovery ..................................................................18ADESA............................................................................................9Allen L. Hawkins Insurance ...........................................................23Auto Portfolio Services .................................................................25AutoTrader.com .................................................. Inside Front CoverBlack Book ...................................................................................22Brasher’s Sacramento Auto Auction .............................. Back CoverCars.com ........................................................................................5Chase ...........................................................................................21Kelley Blue Book...........................................................................17Leedom Group .................................................... Inside Back CoverLobel Financial ..............................................................................11Manheim.com ...............................................................................16Nowcom ..................................................................................... 13Portfolio ......................................................................................19Protective .......................................................................................3SmartAuction ................................................................................15 TD Auto Finance .............................................................................7

INSIDE

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].

THE WEST COAST DEALER IS PUBLISHED BI-MONTHLY BY THE NATIONAL INDPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE (817) 640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDI-VIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF THE WEST COAST DEALER, IADAC, OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF NIADA, DOES NOT CONSTITUTE AN ENDORSE-MENT 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 8 A Deal is a Deal? 22 Legal Minute: The Pros and Cons of Arbitration26-27 Dealer Profiles

FOR INFORMATION ON HOW TO BECOME A MEMBER PLEASE CONTACT [email protected] • (916) 601-4976

IADAC OFFICE

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Rod DavisPresidentBrasher’s Auto AuctionRio Linda, CA 95673916 - 991 - [email protected]

David AahlChairman of the BoardNorth Bay Auto AuctionFairfield, CA 94534707 - 864 - [email protected]

Mark GloverSr. Vice PresidentCounty FinancialGalt, CA [email protected]

Larry LaskowskiThe Auto OutletRoseville, CA [email protected]

Terry DegmetichSecretaryI - Deal CarsRoseville, CA 95678916-870- [email protected]

Vince CardinaleVice PresidentA to Z MotorsWinters, CA [email protected]

Rick GomezVice PresidentRJ Auto BrokersCarmichael, CA [email protected]

Mike CaseyVice PresidentCal West MotorsSan Leandro, CA [email protected]

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John McElroy is host of the long-running “Auto-line Detroit” television program, covering all as-pects of the automotive industry. In this presenta-tion, McElroy provides a thorough and insightful review of where we’ve been, where we now are, and where our industry is headed. Taped at the Automotive Fleet & Leasing Association’s Annual Conference.

Dealers who demonstrate commitment and support the principles and ethical business standards of the CMD® designation com-plete a four-day seminar that addresses Busi-ness Management, Merchandising, Financial Management, Human Resources, and Business Planning. Northwood University provides the in-structor and awards four Continuing Education units for this course. The next class will be March 10-12 at the SuperMedia Hotel and Conference Center at DFW.

MAGAZINECONTENTSINSIDE

ADVERTISERSINDEXAction Auto Recovery .............................................. 6Allen L. Hawkins Insurance Services ....................... 9AutoTrader.com ............................ Inside Front CoverBlack Book ............................................................. 13Brasher’s Sacramento Auto Auction ........ Back CoverCars.com ......................................Inside Back CoverDealerClick .............................................................. 5J. L. Von Arx & Associates ..................................... 12Manheim Advantage.......................................10, 11SmartAuction .......................................................... 7Western Funding ................................................... 16Western General / Protective .................................. 3

6 Named IADAC Quality Dealer of the Year 8 Auction Standards Help Customers 13 Credit Applications Do’s & Don’ts 14 Striking Gold: IADAC’s 42nd Annual Convention


The West Coast Dealer is published bi-monthly by the National Ind-pendent 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. POST-MASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of The West Coast Dealer, IADAC, or the National Independent Automobile Dealers As-sociation. Likewise, the appearance of advertisers, or their identifica-tion as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright 2010 by NIADA Services, Inc. All rights reserved.

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

THE CURRENT STATE OF THE AUTO INDUSTRY

CMD CLASSES

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Dear Editor:

Carfax is constantly looking for ways to further improve the exceptional service we provide our independent dealer customers. We have a dedicated team of professionals that handles any customer requests quickly. As a result of our tireless efforts, I am proud to say that we have streamlined our data re-search process.

The research process is easily started with just a few simple steps. Any Carfax-subscrib-ing dealer in California can access their Car-fax account at carfaxonline.com. Next, click the link which takes you directly to the online Data Correction Form. After submitting the form with the 17-digit vehicle identification number and requested research, a Carfax rep-resentative will work with you throughout the data verification process and confirm the issue has been resolved. In most cases, the entire process is completed in just a few hours.

Carfax is always here to help, especially on the rare occasions that data research is needed. Inconsistent odometer readings, for example, can raise a red flag but may be the results of simple human error. We’ve made it easier for dealers to initiate the process and get a faster resolution. We’re helping our cus-tomers manage a more efficient business and keeping their operations running smoothly.

Any dealer in California that has ques-tions about their Carfax account or the data research process can call Carfax Business Services at 888-695-1885. It is our pleasure to serve you.

Sincerely,

Kari SloanManager, Dealer Business UnitCarfax

Carfax Is Here To HelpSCHOLARSHIPS!

FOR INFORMATION ON HOW TO BECOME A MEMBER PLEASE CONTACT [email protected](888) 315-2869

Westlake Financial Services has named their top five auctions for Q3-2010. They are:

1. Manheim Nevada 2 Rawls Auto Auction 3. Norwalk Auto Auction 4. Brashers Salt Lake Auto Auction 5. ADESA Golden Gate

Westlake Remarketing saw strong performance in the recent quarter and is recognizing these top auctions for their superior efforts. Rankings are based on a combination of sale results and

service. All five topped the sale rankings. Man-heim Nevada ranked first overall for the second straight quarter, ranking first for sale results and third for service.

Bill Walters, VP of remarketing, says over-all auction performance has been improving: “Development of these grading measures has helped us recognize strengths and address short-comings in our current network. The continued support of these auction partners is integral to our remarketing success.”

“Westlake Remarketing Releases Q3 Top Auctions List”

Rod DavisPresidentBrasher's Auto AuctionRio Linda, CA 95673916 - 991 - [email protected]

David Aah1Chairman of the BoardNorth Bay Auto AuctionFairfield, CA 94534707 - 864 - [email protected]

Mark GloverSr. Vice PresidentAzteca Auto SalesGalt, CA [email protected]

Larry LaskowskiTreasurerThe Auto OutletRoseville, CA [email protected]

Terry DegmetichSecretaryI - Deal CarsRoseville, CA 95678916-870- [email protected] Cardinale

Vice PresidentA to Z MotorsWinters, CA [email protected]



10 10 Questions for AutoCheck14 Auction Security18 In the Spotlight

12 Local Auto Dealers Usedby Clunkers

MAGAZINECONTENTS

ADVERTISERSINDEX

INSIDE

Action Auto Recovery ..................................................8ADESA ......................................................................17AutoTrader.com ................................ Inside Front CoverAutoXplorer................................................................13Black Book..................................................................19Brasher’s Sacramento Auto Auction ..............Back CoverCars.com .......................................... Inside Back CoverDealerClick ..................................................................5J. L. Von Arx & Associates ..........................................9Lobel Financial ..........................................................15Manheim Advantage ..........................................10, 11SmartAuction ..............................................................7Western Funding ........................................................18Western General / Protective........................................3

Dealers who demonstrate commitment andsupport the principles and ethical business stan-dards of the CMD� designation complete a four-day seminar that addresses Business Management,Merchandising, Financial Management, HumanResources, and Business Planning. NorthwoodUniversity provides the instructor and awards 4Continuing Education units for this course.NEXT CLASS OCTOBER 28-30, 2010VISIT NIADA.COM FOR MORE INFOMATION

CERTIFIED MASTERDEALER� PROGRAM:

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NATIONAL INDEPENDENTAUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TV

2521 BROWN BLVD. • ARLINGTON, TX 76006-5203PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF(800) 682-3837 OR [email protected] WEST COAST DEALER IS PUBLISHED BI-MONTHLY BY THE NATIONAL IN-DPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORA-TION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE (817)640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONALOFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLI-CATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATE-MENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUALAUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF THE WESTCOAST DEALER, IADAC, OR THE NATIONAL INDEPENDENT AUTOMOBILEDEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, ORTHEIR IDENTIFICATION AS MEMBERS OF NIADA, DOES NOT CONSTITUTE ANENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT2010 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

FOR INFORMATION ON HOW TOBECOME A MEMBER PLEASE [email protected](888) 315-2869

EXECUTIVE COMMITTEE

Mike Macaulay, Magazine Committee Chair • Car SystemsRoseville, CA • 916-784-7155 • [email protected]

When it comes to motor vehicle bonds, alldealer principals are not alike. At BondSource Insurance Agency, we offer a com-mon sense approach to underwriting. Abusiness’ net worth is the key along with thepersonal character of the business owner.

Since 1993, Bond Source InsuranceAgency is committed to fast and friendlybond service. IADAC members may contactNancy R. Chapman for a bond quote at888-855-0100 or [email protected].

D E A L E R B O N D H E L P

BREAKING NEWS!BREAKING NEWS!

Check out the newlyredesigned IADAC websiteat www.iadac.org.We want to know what youthink of the new site. Let usknow by e-mailing us [email protected].

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Dear Editor:





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EXECUTIVE COMMITTEE








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MAGAZINECONTENTS

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EXECUTIVE COMMITTEE








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Mike Macaulay, IADAC Magazine/Website Chairman [email protected]

We are looking forward to IADAC’s Annual Convention, scheduled for Oct. 7-8, at the Gold Country Casino and Hotel in Oroville. By scheduling the convention four months in advance, we hope to inform the entire membership about the event….and even more importantly, to get our members committed to attend. We are continuing the format that was started last year by allowing vendors to set up booths at the auctions on Tuesday, Wednesday and Thursday of convention week, and then to transition to Gold Country Casino for the meetings and activities on Friday and Saturday.

One of the main purposes of an annual convention is to elect a new executive committee and board of directors. In preparation for that, I am in the process of appointing three past presidents of the association to serve on the nominating committee. This committee will be announced at this summer’s quarterly meeting, which will be held at David Aahl’s Delta House.

I mention the nominating committee to let you know we are always looking for more dealers to help fight the good fight. In other words: WE NEED YOUR HELP. We need your expertise and your experience, we need your perspective and your optimism, but most importantly, we need your commitment. We need dealers who are determined to keep the auto industry viable and profitable for years to come.

I heard a news report a few days ago that discussed which states were the most business-friendly. It’s no surprise California was at the bottom of the list. We know we’re regulated in every aspect of our businesses and there are politicians who would like to regulate us even more. We can either complain about this realty, or we can be more proactive and work together to change it.

The best voice the used auto dealers have in California is IADAC. If you want to help change the future of the automotive industry in California, then we would love to hear from you.

B Y R O D D A V I S , I A D A C P R E S I D E N T

EXECUTIVE COMMITTEE

PRESIDENT’S MESSAGE

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

• Special Features • Industry Events

PLUS:Automotive Industry News & Special Monthly Programs

www.niada.tv

Dealer Education

FREEDEALER EDUCATION ONLY ON NIADA.TV24/7

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During my travels across the state, I’ve met some great people, hardworking auto dealers who have shared their struggles with inventory shortage, financing difficulties and slow economy. Most dealers have found ways to lower overhead to offset smaller profits so they may be prepared for the slow economic rebound that has been predicted. Non-essential spending is a common theme, and that does add to the challenges of signing new IADAC members. We are thankful we have the support of the auto auctions as their role in Member Benefits is undeniably huge.

Aside from the monetary payback members receive through discounted buy and sell fees at auctions, IADAC accomplishments on the legislative front have been quietly spectacular. Bill Dohring, our full-time lobbyist, has notched his IADAC belt many times in the recent past. Most of you are probably aware IADAC battled and defeated legislation that would increase your dealer bond to $100,000, but did you also know the

$55 doc fee and the $50 smog fee are results of IADAC’s legislative negotiating?

Additionally, IADAC and Assemblyman Fuentes drafted the legislation that allows the vehicles of curbstoners (unlicensed dealers) to be towed and impounded and required that title transfer and payment of all fees and penalties must be made before regaining possession? That legislation has resulted in hundreds of vehicles towed and numerous arrests, benefiting local government, consumers and auto dealers alike. This helps the legitimate dealers by leveling the playing field so they’re not competing with unethical, unlicensed people who are stealing their customers.

Dealers should recognize that despite their need to be conservative with overhead, IADAC membership should not be considered as optional.

So I ask that as you talk to your fellow dealers, find out if they are IADAC members. If not, suggest they join so our voice will be stronger. If you don’t believe our elected

officials could pass legislation that would actually harm the auto industry, remind yourselves who created the economic mess that we deal with every day.

I’ve recently returned from the NIADA Annual Convention & Expo in Las Vegas and I must say I was impressed. The guest speakers were outstanding, and the educational workshops provided new ideas to improve business procedures. IADAC members should not forget that a portion of your dues automatically enrolls you as a member of NIADA. There are numerous benefits available not provided to you by IADAC, such as NIADA.TV (a free service), where you can watch informative videos on any aspect of the auto industry.

Don’t forget to make plans to attend IADAC’s Annual Convention Oct. 7-8 at Gold Country Casino and Hotel in Oroville. Registration fees will be an unprecedented low $99 for members, which will include all meals. Registration information can be found elsewhere in this issue.

Executive Director’s Message B Y L A R R Y L A S K O W S K I

ServNet Chairman of the Board Bob McConkey announced Brasher’s San Jose Auto Auction has been approved for membership by both ServNet and the National Auto Auction Association. Opened in the summer of 2010, Brasher’s San Jose Auto Auction is located in the heart of the Silicon Valley and the fourth largest market in the U.S. The auction holds a sale every Thursday at 9 a.m. that includes consignments from new and used auto dealers, rental companies, credit unions and finance companies.

“We are delighted to welcome Brasher’s San Jose Auto Auction to ServNet and to extend ServNet’s reach into the San Francisco Bay Area,” said McConkey. “The Brasher family has been a leader in the auto auction industry since founding its first auction in Salt Lake City, Utah, in 1949. Both auto dealers and commercial consignors are certain to benefit from the Brashers’ years of experience and success in the industry at their new auction in San Jose.”

San Jose Auto Auction is the newest member of the Brasher family of auctions in the West. In addition to San Jose, the Brashers operate facilities in Salt Lake City, Sacramento, Reno, Portland, Eugene and Boise.

“We’ve long looked at San Jose as a great opportunity to serve the San Francisco Bay Area, Silicon Valley and the Central Valley” said John Brasher, auction president and owner. “We determined that this was an excellent time to launch an auction that offers the level of service that has set the Brasher auctions apart from the competition for more than 60 years.”

Brasher reports industry veteran Gary Mobley heads the management team at Brasher’s San Jose Auto Auction, and will also serve at the auction’s key fleet and lease contact.

Brasher’s San Jose Auto Auction Affiliates with ServNet, NAAA

Brasher’s Northwest Auto Auction has been named Bank America’s 2010 Specialty Auction of the Year. The award continues a winning tradition at Brasher’s Northwest Auto Auction, which has received regional and national recognition from Bank of America six times since 2002.

“It is a thrill for all of us at Brasher’s Northwest Auto Auction to be named the top auction in the country for Bank of America,” said Lisa Larkin, auction general manager. “Our dedication to superior service is more than just a slogan: we work hard to prove to our customers that our auction is their best choice for remarketing cars and trucks, RVs and specialty units. When those efforts differentiate us not only from other auctions in our area, but from all other auctions in the country with a customer like Bank of America, we know that our hard work is being recognized and bringing results on the auction block.”

Bank of America takes five key areas into consideration when determining its Auction of the Year: marketing, customer service, sales, operations and reconditioning.

“Brasher’s Northwest Auto Auction has a cohesive team that truly cares and welcomes feedback. The auction is constantly looking for ways to improve the process both for the seller and the buyer,” said Janelle Jones, Bank of America auction representative. “This sale executes every month without a hitch, drawing buyers from all across the map. The team is dedicated to working hard for Bank of America.”

Bank of America is a featured consignor at the World Famous Specialty Auction held at Brasher’s Northwest Auto Auction on the second Wednesday of every month. The event, which is the largest in the West, features more than 500 RV, marine and powersports units running through the auction arena and across the auction block. The auction also offers a dealer consignment sale every Wednesday and an RV sale on the second and forth Wednesday of the month.

Brasher’s Northwest Auto Auction has been named a top auction for Bank of America six times in nine years (2002, 2005, 2006, 2007, 2008 and 2010). It also is a four-time winner of ARI’s Auction of the Year Award, and a two-time winner of Capital One’s Auction of the Year Award for the Northwest Region.

Brasher’s Northwest Auto Auction Leads Nation for Bank of America

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A Dealis a Deal?

It should be no surprise to you how many federal consumer laws and regulations affect the typical automobile dealer. The Truth in Lending, Equal Credit Opportunity and Fair Credit Reporting acts are all too familiar. The same is true of regulations Z and B and the various Federal Trade Rules, including the Used Car Rule. Then, of course, there are state unfair business practice acts, common law fraud, misrepresentation and improper disclosure to consider.

The fact is you must be more careful than ever to ensure a deal is put together the right way. As the stack of paperwork that must be signed by your customer grows, so does the opportunity for mistakes and mistakes can cost you money – perhaps far more money than you realize. The winter issue of The Specialist reported a recent fraud and failure-to-disclose situation where a dealer’s customer was awarded $218,000 in punitive damages (not insurable in many states) as the result of a lawsuit involving damage disclosure. The customer was told the vehicle was “in perfect condition,” “had never been wrecked” and was a “one-owner vehicle.” Evidence later proved none of these assertions were true. Take appropriate measures to protect your dealership from damage disclosure and truth in lending complaints and lawsuits.

We offer the following suggestions:

MANAGEMENT ISSUES• Provide extensive training to sales and F&I personnel on all consumer laws.• Have legal counsel review all sales, leasing and other applicable documents for compliance with federal, state and local laws.• Implement a vehicle sales checklist to establish standard procedures for staff.• Have customer sign or initial forms as needed.• Establish policies to address ethical business practices and ensure your management team abides by them.

TRADE-INS• Perform a title search to verify mileage, past ownership and lien holders.• Develop and use a seller’s disclosure, customer title disclosure and trade-in certification or equivalent forms to document mileage, prior damage, airbag deployment, salvage vehicles, frame damage, etc.• Odometers must be inspected carefully for rollback, replacement or tampering.• Vehicle appraisers (and managers) must be diligent in evaluating trade-ins and determining prior damage manager.

AUCTION VEHICLES• Use a title search firm or state agencies to check vehicle history.• Deal with auctions that guarantee the title is free and clean.• Don’t purchase vehicles with prior frame damage.

RETAIL TRANSACTIONS• In conjunction with legal counsel, consider developing and implementing a buyer’s arbitration agreement requiring the customer to seek relief through an arbitration process in lieu of litigation. We neither recommend nor disfavor arbitration agreements. This is a business decision that only you and your advisors can make. Note: as of Jan. 1, 1999, the American Arbitration Association (AAA) will not administer an arbitration proceeding if the signed agreement does not meet minimum standards established by its National Disputes Advisory Committee. The AAA’s Consumer Due Process Protocol includes a statement of 15 principles intended to protect consumer rights.• To avoid being held financially responsible to a creditor deemed unsecured by a bankruptcy court, process the title work promptly to ensure timely perfection in all cases within 20 days after the vehicle is delivered.• If the customers’ creditworthiness is questionable, delay the delivery as the 20 days noted above does not begin until the vehicle is delivered.• Be very cautious with deals involving out-of-state paperwork or missing titles, it may be difficult to process the necessary title paperwork• Videotape the sales transaction in the business office, but only after the customer (and your employee) voluntarily agree to be videotaped. Consult your legal counsel to determine how long the tape should be kept and the potential risk of not taping or saving all transactions. While videotaping can be a good idea, it isn’t one you should proceed to undertake without careful thought of all ramifications. New federal and state consumer laws are passed every year, so it is important to understand and educate dealership personnel on how to comply. Your legal counsel and auto dealer associations are excellent resources for keeping appraised of these new regulations. Contact your local Zurich account executive for additional information on how these laws affect your business. If you have any questions or comments, contact your Zurich account executive or the Loss Prevention Department at 800-821-7803.

New federal and state consumer laws are passed every year, so it is important to understand and educate dealership personnel on how to comply.

B Y Z U R I C H F I N A N C I A L S E R V I C E S G R O U P

This Loss Prevention Bulletin is provided for informational purposes only. Please consult with qualified legal counsel to address your particular circumstances and needs. Zurich is not providing legal advice and assumes no liability concerning the information set forth above.

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B Y K E V I N A Y L M E R

We have all heard the latest advertising strategy adopted by a growing number of auto dealers. Refrains from “I’m online only,” and “…print advertising doesn’t work anymore” are fairly common. There are very compelling reasons to adopt this posture as a part of an overall marketing plan for a dealership. Data suggests most auto buyers use the internet to educate themselves about manufacturers, specific vehicles and pricing.

Many dealers report people to their showrooms come armed with printouts of vehicles available for sale at other dealers (even if those autos are from outside the market they are in), with the latest on rebates, trade-in values and anything else they can find online to aid in their attempts to drive the selling price downward.

A dealer who uses a website, dealer feeds and e-mail leads as their sole tools for selling vehicles is missing a large portion of the buying public. Industry reports show niche publications remain a viable and effective tool for driving traffic to lots – both franchise and independent.

The 2009 NIADA Used Car Industry Report, the 2008 Northwood Dealer Walk-in Study and the NADA Data Report show the Internet is the number one media source driving walk-in traffic. According to these studies, the next best driver of walk in traffic is not newspapers, radio, TV or direct mail. The report discovered the most effective choice of media other than the Internet is classified magazines.

An advertising plan that combines Internet advertising and a classified magazine provides nearly 70 percent of all walk-in traffic generated by advertising. It is critical this migration of buyers from daily newspapers to niche

publications that feature the inventories of local dealers be recognized by all size dealerships. If there is an automotive classified magazine in your market, you can be sure dealers using this marketing tool are enjoying excellent response to their printed message.

HOW DO WE KNOW THIS?Telephone call tracking reports, as

well as the significant number of copies of these print products that are picked up each and every week demonstrate the car-buying public rely on this form of advertising to help them in their decision-making process.

For example, in the Bay Area, there is a print product (Bay Classifieds) that moves more than 40,000 copies every week. This publication, available in thousands of locations, is gobbled up 52 weeks a year by people who make the conscious choice to look for the latest copy.

In the area around rural Oroville, Calif., Great Northern Wheels & Deals sees nearly 25,000 copies of its publication gobbled up each and every week. Throughout California, from the Recycler in Los Angeles to The Nickel in Redding, auto buyers consistently grab their copy of these publications.

If print is really dead, how do we explain this consistent demand from buyers for a print product that provides them with information from which they can make an informed buying decision? Shouldn’t we have seen an eroS ion of demand for these products “…because everyone shops on the Internet?”

The publishers of these and other niche publications report strong demand for the products, and are proud of the product’s ability to generate e-mail leads, telephone calls and walk-in traffic. These print products provide dealers, large or small, the opportunity to tell a story about what makes their stores unique. Many dealers report customers walking onto lots with the print product in hand asking to see a particular car featured in a print ad. This is likely the best quality up a dealer can hope for.

Contrasting that type of potential buyer to some of the Internet leads dealers receive from all over the country, we can see the local buyer carrying a local publication and talking to a local dealer is what every dealer would like to have more of.

Kevin Aylmer is vice president for Target Media Partners

An advertising plan that combines Internet advertising and a classified magazine provides nearly 70 percent of all walk-in traffic generated by advertising.

Is Automotive Print Advertising Dead (or dying?)

Automotive Print Advertising Automotive Print Advertising Automotive Print Advertising Automotive Print Advertising Automotive Print Advertising Automotive Print Advertising Automotive Print Advertising

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2011 BHPH Buyer Study from AutoTrader.com

Key Messages to Communicate Focus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline. Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!” Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

The FindingsFour out of five BHPH customers conduct

research before visiting the dealership. According to the study, 81 percent of BHPH vehicle buyers said they performed either some or a great deal of research as part of the car shopping process before going to a dealership compared to the 19 percent who stated they conducted very little research.

Seventy percent of BHPH shoppers regularly use the Internet; that’s as much as traditional shoppers for general purposes. However, BHPH car buyers do not use the Internet for vehicle shopping as much as traditional auto buyers.

With four out of five shoppers conducting research prior to visiting a dealership coupled with the high percentage of BHPH customers already online, the implication is there’s an opportunity for BHPH dealers to reach and influence their shoppers by tapping into the online automotive space with advertising messages and information that resonate with the targeted consumer.

It’s important for BHPH dealers to align their advertising with the unique needs of BHPH shoppers. The need for financing approval drives the shopping process for BHPH shoppers. Nearly two out of three BHPH customers enter the process with securing financing or identifying a dealer as their first priority. While this information is in line with what the BHPH industry has long suspected, the key is to align your advertising messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer.

In October 2010 and January 2011, the National Alliance of Buy Here-Pay Here Dealers (NABD) and AutoTrader.com teamed up for a groundbreaking study to define the consumer profile of the average BHPH customer and to understand the unique shopping needs of this customer segment. The two-part study included qualitative focus groups conducted in Los Angeles and Dallas and a national quantitative online survey among 606 BHPH buyers who purchased within the previous 18 months.

The results of this study affirm for the first time many common perceptions among the BHPH community about the priorities and behaviors of BHPH customers. There are also some new findings about their Internet usage as well as the amount of research BHPH shoppers are conducting prior to visiting a dealership. Finally, we identify key messages BHPH dealers can focus on to more effectively target their advertising and influence BHPH shoppers during the shopping process.

CONSUMER PROFILE OF THE AVERAGE CUSTOMERBHPH Buyers vs. Traditional Buyers

Understanding Buy Here-Pay Here Customers: 2011 BHPH Buyer Study from AutoTrader.com Word count: 619 In October 2010 and January 2011, the National Alliance of Buy Here-Pay Here Dealers (NABD) and AutoTrader.com teamed up for a groundbreaking study to define the consumer profile of the average BHPH customer and to understand the unique shopping needs of this customer segment. The two-part study included qualitative focus groups conducted in Los Angeles and Dallas and a national quantitative online survey among 606 BHPH buyers who purchased within the previous 18 months. The results of this study affirm for the first time many common perceptions among the BHPH community about the priorities and behaviors of BHPH customers. There are also some new findings about their Internet usage as well as the amount of research BHPH shoppers are conducting prior to visiting a dealership. Finally, we identify key messages BHPH dealers can focus on to more effectively target their advertising and influence BHPH shoppers during the shopping process. Consumer Profile of the Average Customer BHPH Buyers vs. Traditional Buyers

58% Female

50% Female

39 Years Old

47 Years Old

<$50k Annual Income

>$50k Annual Income

44% Married

60% Married

Poor Credit Rating

Excellent/Very Good Credit Rating

The Findings Four out of five BHPH customers conduct research before visiting the dealership. According to the study, 81 percent of BHPH vehicle buyers said they performed either some or a great deal of research as part of the car shopping process before going to a dealership compared to the 19 percent who stated they conducted very little research.


With four out of five shoppers conducting research prior to visiting a dealership coupled with the high percentage of BHPH customers already online, the implication is there’s an opportunity for BHPH dealers to reach and influence their shoppers by tapping into the online automotive space with advertising messages and information that resonate with the targeted consumer. It’s important for BHPH dealers to align their advertising with the unique needs of BHPH shoppers. The need for financing approval drives the shopping process for BHPH shoppers. Nearly two out of three BHPH customers enter the process with securing financing or identifying a dealer as their first priority. While this information is in line with what the BHPH industry has long suspected, the key is to align your advertising messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer. First Step in the Shopping Process



Key Messages to Communicate Focus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline. Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!” Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

First Step in the Shopping Process

KEY MESSAGES TO COMMUNICATEFocus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline.

Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!”

Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

S E V E N T Y P E R C E N T O F B H P H S H O P P E R S R E G U L A R L Y U S E T H E I N T E R N E T



BHPH

Understanding Buy Here-Pay Here Customers:

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An Independent Perspective: Surviving the

Used-Inventory Crunch

more difficult to acquire at a price that won’t completely erase store margin.

Underwood offered what veteran dealers readily understand, “Small cars are easy to sell, but the problem is they have very thin margins.”

Is the Inventory Solution Online?When asked about whether online

avenues would be a better route to find vehicles that would turn, Underwood gave a mixed assessment.

“The online route obviously gives you more coverage area but the problem is that you’re buying cars in different locations. If you only have one or two in each area, you’ve got to try to group them together to get the transportation done in time,” Underwood explained.

“Buying a truckload is hard to do unless you’re paying a considerable price for them. Sometimes, you’re only buying maybe two in Dallas and one in Hattiesburg (Miss.),” he continued.

“If you’ve got 10 cars scattered across the Southeast, you’ve got a problem trying to get them back in a reasonable time or getting a good price on getting them back,” Underwood went on to say.

Even if logistics can be difficult, Underwood has seen plenty of online activity while he’s been at a physical auction.

“I think a lot of dealers are buying online. I’ve seen dealers from all across the country bidding on cars. That’s the advantage, you have the opportunity to buy either in lane or online,” Underwood observed.

Franchise Stores Feeling the Pinch, Too

While Underwood is a veteran independent dealer and is at the top of NIADA, he doesn’t think franchise stores are having any easier of a time finding inventory.

“The old stories back in the day were the new-car dealers were getting the trade-ins so they don’t have as difficult a time. But I don’t find that to be true,” Underwood told Auto Remarketing. “I think the new-car dealers are not getting the trade-ins that they got in the past. And if so, they’re not the quality of car that they’re used to because now they’re retailing high-mileage cars on franchise dealer lots now more than ever.

“New-car dealers are standing toe-to-toe with independent and they’re bidding on these cars, too. And they’re paying the price,” he acknowledged. “You may find in many cases where a franchise dealer will stay a little longer and pay more for it. But they’re still facing the same dilemma.”

Buyers Still in the MarketThough inventory managers are

struggling to scour auction lanes to find turn-ready models, Underwood thinks

buyers are still coming to lots or shopping online, ready to make a deal.

“It’s not a problem with traffic. The problem is how we’re paying the price for cars. People come in and they want to buy cars. They’re looking to do business. That’s not the problem,” Underwood insisted.

“And it’s not isolated to a certain location. People are coming into the stores to do business. The problem is we all have a small inventory to choose from and our margins are now less than they’ve ever been because we’re paying more for the cars,” he continued.

“We’re not seeing people necessarily complain so much about the price of the car. The problem is getting them financed and getting them to put enough down. It’s a three-ring circus – the finance company, the dealership and the customer – and we’ve all got to agree upon what’s a fair value,” Underwood added.

What If Gas Prices Drop?Analysts also have been projecting

fuel costs eventually will dip from the nationwide average that’s at about $4 per gallon. Should gas prices fall significantly, dealers could be left in the lurch with lots of fuel-efficient models because as Underwood said, “Americans don’t like small cars.”

NIADA’s president conceded, “The biggest fear right now is you buy a car at a certain value and, by chance, tomorrow the market just drops. Now when you’re retailing that car, you’re cost base is retail-plus. You can lose money on 30, 40, 50 cars on the lot. That’s the biggest fear right now.

“Falling gas prices would take the pressure off the small cars,” Underwood predicted. “We all know we’re paying too much for small cars based on the emotion of good gas mileage. There’s no reason why the 2010 Hyundai Accent should bring $10,500 or $11,000. You could probably buy that car new for not much higher than that.”

Advice to Fellow DealersUnderwood has been instructing his

lot personnel to use a strategy that could work for any size dealership – franchise or independent.

“You have to get cars that are as close to retail possible, but you’re going to pay the money for it,” Underwood asserted. “Back in the old days, you could go out and replace a car tomorrow. Today you probably can’t. You need to make money when you sell that car.

“You’ve got to make sure you buy right,” he went on to say. “There’s an old saying in the car business: You make your money when you buy the car; you realize the profit when you sell it. If you buy right, that’s half the battle.”

R E P R I N T E D O N B E H A L F O F N I C K Z U L O V I C H , S TA F F W R I T E R , A U T O R E M A R K E T I N G

Speaking for independent dealers from Connecticut to California, Auto Remarketing caught up with Anthony Underwood this week while he was driving back to his dealership after making one of his biweekly auction trips.

The former NIADA president (his term ended in June), called the search for inventory – especially fuel-efficient models – “amazing.”

“You talk with seasoned dealers who have been in the business for 30 or 40 years and they all say, ‘It’s the worst I’ve ever seen it,’” Underwood shared with Auto Remarketing.

“The best description out here is dealers are saying it’s not any fun anymore. It staggers the imagination that we’re paying this,” Underwood added.

While returning to his store located near Birmingham, Ala., Underwood recollected his own personal experience with a gas sipper. Three months ago, he spotted a 2011 Ford Focus coming down the lane and bought it for $11,500 despite his instincts telling him that was too much.

“Now that same vehicle is $13,500, maybe $14,000. To make it worse, a 2009 Focus is bringing $11,000 now. That’s just how ridiculous it is. When’s it going to end? I don’t know,” said Underwood, who was NIADA’s National Quality Dealer of the Year in 2003.

“Most dealers have a memory like an elephant,” he continued. “We all remember what we paid a year ago or two years ago. That’s the paradox of it all. This is an unprecedented time we’re dealing with. We don’t have a playbook to know what we’re doing.”

Some analysts have tried to compare the current situation with 2008, especially in terms of gas prices. However, Underwood doesn’t believe that’s necessarily a fair assessment.

“Keep in mind, when gas spiked three years ago, people were trying to dump SUVs and you could buy them for a song. Now, there’s no escape. There’s no particular vehicle category that has a price break,” Underwood surmised.

And that especially seems to be the case with fuel-efficient models. Even units such as the Chevrolet Cobalt – a model Underwood thinks dealers used to be able to find “any day of the week” – are becoming

newsR E P R I N T E D W I T H P E R M I S S I O N BY A U T O R E M A R K E T I N G

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The Red Flags Rule doesn’t require any specific practice or procedures for your identity theft prevention program. It gives you the flexibility to tailor it to the nature of your business and the risks it faces. The FTC will assess compliance based on the reasonableness of a company’s policies and procedures. Businesses with a high risk for identity theft may need more robust procedures – like using other information sources to confirm the identity of new customers or incorporating fraud detection software. Groups with a low risk for identity theft may have a more streamlined program; for example, simply having a plan for how they’ll respond if they find out there has been an incident of identity theft involving their business. The FTC has designed a form to help groups at low risk for identity theft put together a program. It’s available at www.ftc.gov/redflagsrule.

The Red Flags Rule also doesn’t require you use Social Security numbers or any

other specific identifying information. Whether you collect Social Security numbers or other information to verify a customer’s identity depends on the nature of your business and the risks you face. Actually, collecting a Social Security number by itself is not a reliable way to verify someone’s identity because the numbers are widely available and do not prove a person is who he or she claims to be. However, Social Security numbers can be helpful as part of a more comprehensive identity verification process; for example, as a way to check against information from other sources or as a way to get other information, like a credit report, which can be used to verify a person’s identity.

It’s a good data security practice not to collect more information than you need. If you are asking for a Social Security number, but not actually using it as part of a more comprehensive authentication process, reconsider whether your business really needs to collect and maintain it.

Red Flags Rule Procedures, SSN CollectionWhether you collect Social Security numbers or other information to verify a customer’s identity depends on the nature of your business and the risks you face.

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Everybody Wants a Deal!and every year you renew, you get $ 4,800 in buy-sell fees at participating auctions.

So you see, without IADAC, you might not be in business or if you were still in business you may not be making as much profit. Even if you don’t attend the meetings, which can help you make more money through our educational programs, you should join to help protect you business and help support those dealers

have been supporting you for years. A final issue: you are all required to

have continuing education every two years to maintain your license. Most of these courses cost anywhere from $75 to $85. IADAC offers the course for members for a mere $25. So come to the convention, learn a lot and meet your continuing education requirement as a member for only $25.

I can’t think of a person who doesn’t want a deal! People every day cut out coupons for deals and check the newspaper to see has the best price on any given item. Even the customers that come on your lot are grinding you to get the best DEAL!

I started lobbying for IADAC a little over 30 years ago and talk about a great deal, the dues back then were only $ 295 and remain the same today! And you get more for your dues now than you did then. IADAC has made you money every year you have been in business. Whether it is increasing your doc fee from $25 to $55 or increasing your smog fees, the association is always there for the used dealer whether a member or not.

How many of you remember when the federal government passed a law that prohibited a dealer from selling a car without a title in hand? How many dealers had the privilege of having a title in hand? Many sales were lost during that time, so the dealers turned to IADAC! We had to work with the DMV to allow California dealers to get some relief from such an onerous law that almost put you out of business.

Our first step was to get the state to allow vehicles being purchased at auction to be treated the same as a auto where the title was held at a bank or finance company. Realizing this was not enough, we went back to DMV and over a period of months created Form 262 that allowed the dealers to transfer the car without a title. For all of you who are not members, would spending $295 been worth it to you to keep you in business?

Were it not for IADAC, how many of you would have been able to stay in business having to give a bumper-to-bumper warranty on any car you sold with a 140,000 miles or less? IADAC once again came to front for all California’s used auto dealers and killed the bill, thus keeping you in business.

Additionally, how many of you are aware of the Vic Snyder IADAC scholarship? Anyone with two consecutive years of IADAC membership becomes eligible for their children and grandchildren to apply for and receive money for college, trade school and more. The minimum amount is $1,000.

Let’s see, one $1,000 scholarship, is worth three years of dues! Not to mention the scholarship, with each membership

BY B I LL DOHRING, IADAC LOBBYIST

Were it not for IADAC...

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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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Each year the Independent Auto-mobile Dealers Association of Califor-nia bestows upon one of its members the Victor J. Snyder Memorial Quality Dealer of the Year Award. This is the highest award given by IADAC and recog-nizes a dealer’s contribution to his/her com-munity, his/her association and the public he/she serves.

This year’s Quality Dealer is Mike Gough of MG Auto Wholesale in Vacaville, California.

Mike was born in San Diego, yet began his work in the auto industry in Indiana. He quickly showed his proficiency for the business. He took a brief hiatus in Boston, then returned to the auto industry working at Fairfield Auto Sales and California Clas-sics before forming MG Auto Wholesale in 2000 in Vacaville, California. Mike has been an IADAC member since 2005, and is a well respected wholesaler in the community.

Generous to a fault, Mike is quick to donate items, time and money for a worth cause. He volunteers and organizes events, such as crab feeds, at the local high school, Will C. Wood. He’s an avid golfer and soft-ball player. In fact, his softball team won a tournament in Lake Tahoe this year.

Mike has enjoyed success built on hon-esty and branded his business with fair practices. Mike is truly the type of dedi-cated dealer IADAC members had in mind when they first conceived the Victor Sny-der memorial Quality Dealer of the Year Award in 1969.

IADAC Quality Dealer of the Year Awarded!

NEW MEMBER BENEFIT!IADAC’s recently updated website, www.iadac.org, has a new feature that is of great value to our members. It is a Question and Answer (Q&A) blog for the use of our mem-bers. Members can ask any industry related ques-tion. We have a panel of industry experts that will give their best opinion on the matter at hand. This service is free to our members.

This feature is unique to California. We are lead-ing the way, nationwide, to providing real time information to our members. Just think; the next time you wake up at 3a.m. with an issue bugging you……..click onto us and ask!

Here’s how it works:1) Send an e-mail to IADAC through our website requesting your login and pass-word (all members have them issued)

2) Log in to the “Members Only” section, using your login and password

3) Check our library of FAQ (frequently asked questions) for the answer to your question

4) Ask your question, giving us as much information/background as possible - we want to get it right the first time.

5) Your question will be answered within a couple days - you will be sent a link to the answer posted on our site, and the Q&A will be added to our FAQ!

Please email me directly with any concerns or ad-vice to help get the ball rolling. Spread the word to all your friends!

Mr. Rey Guluarte, of Autos Guluarte - El Centro, CA, has volunteered to translate any questions posted in Spanish.

Best Regards,

Mike Macaulay - IADAC Magazine/Website ChairmanEmail- [email protected]

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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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Business is Getting Better

Joe Lescota, Northwood University’s automotive marketing department chair, was named the winner of the 2011 Ring of Honor award at the National Independent Automobile Dealers Association (NIADA) 65th Annual Convention & Expo at Caesars Palace last night. Inductees to NIADA’s Ring of Honor are a prestigious and honorable circle of men and women who have dedicated their careers to the automobile industry, according to Michael R. Linn, NIADA’s CEO.

Lescota, who has more than a quarter-century of retail automotive experience, is the instructor for NIADA’s Certified Master Dealer Program and sits on the board of trustees of the NIADA Foundation.

“He has filled every management position within all departments of various dealerships, including dealer operation. He quickly gained a reputation for developing innovative management techniques leading to reduced employee turnover and increased customer retention and satisfaction,” Linn said. “Joe is a person for whom I have great admiration and respect.”

Lescota has conducted workshops and educational seminars for General Motors, Ford, Chrysler, Honda and many other automakers. He served as the program director for the Automotive Satellite Television Network and helped to introduce college credit courses into dealerships nationwide via distance learning.

In addition, Lescota, was named Man of the Year by the Association of Finance and Insurance Professionals in 2006 and has received Northwood’s Faculty Excellence Award five times in the last decade. He is the twenty-first inductee to the NIADA Ring of Honor.

NIADA Honors 2011 Ring of Honor Award

Green Earth Technologies Making Green Motor Oil and Cleaning Products

It’s easy to get burned out on green products being advertised to the auto industry and consumers, and it is important to do a little bit of homework to make sure the company isn’t merely “greenwashing.” Green Earth Technologies which domestically produces G-OIL, 5W-30 Motor Oil – an API certified bio-degradable, bio-based, full synthetic green motor oil – the product has been clean and legitimate enough to end up on shelves at Walmart and The Home Depot. Its G-Clean Concentrated formulas now carry the Eco Options label, The Home Depot’s certification for products that meet certain environmental performance criteria for cleaning. Every product with the Eco Options label has less of an impact on the environment than competing products, the company says. Other green auto products offered by the company include G-Clean Glass Cleaner with a plant-based formula, Bio-Synthetic 2-Cycle Engine Oil, and G-Clean Mold & Mildew Stain Remover, a concentrated dissolvable detergent.

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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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Dealer plates are issues to licensed retail and wholesale dealers, but with limited use. Dealers can lose their assigned plates if they are caught misusing them.

THESE ARE EXAMPLES OF PROPER USE OF A DEALER PLATE:• A dealer plate is properly used to move a

vehicle currently not registered. This means you can use your plates on an inventory vehicle to either test drive it with a customer, or move it to another location for repair, or to sell it (auto auction, other dealer).

• An owner can use any vehicle in the inventory for their own purpose as long as they do not use a commercial vehicle carrying a load. In other words, a pickup truck in inventory used by the owner, but cannot carry ANYTHING in the bed of the truck. The reason is no weight fees have been paid to the state.

• A dealer can assign a dealer plate to an employee to use for their personal use. However, the employee must be a licensed salesperson, and the dealer must have a rental agreement in place with the salesperson.

Dealer plate abuse is cause for DMV to suspend use of the plates, or even suspend the dealer’s license to operate. Examples of this kind of abuse are: spouses and children of dealers driving on dealer plates if they are not owners, loaning dealer plates to friends or business associates, or not properly displaying the plate on the vehicle.

The DMV requires dealers AFFIX the plate to the vehicle. This requires the plate to be attached, not just thrown in the window of the vehicle.

If you have any further questions about dealer plates, contact us for advice. When we teach our dealer education courses, both pre-licensing and continuing education, we spend a lot of time on this subject.

This information has been provided by Dealer Education Services, IADAC associate member and supporter, and California’s first and largest school for the dealerships. DES, which has been associated with IADAC since its inception, also provides vehicle registration service. For more information, contact Dealer Education Services at 888-323-0031 or [email protected].

DMV Tips-Proper Use of Dealer Plates

Dealer plate abuse is cause for DMV to suspend use of the plates, or even suspend the dealer’s license to operate.

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Are Attorneys Involved in Arbitration?

Yes. Most participants in arbitration are represented by attorneys. There is no ban on attorneys like in small claims court cases. The claim that there are no attorneys in arbitration is simply not true.

Is There Discovery in Arbitration?

Yes. In California, most arbitration clauses reference the California Arbitration Act which allows for discovery such as depositions, interrogatories, and demands for documents. Discovery often increases the costs you will incur in prosecuting or defending claims in arbitration.

Will I Have a Judgment against Me if I Lose?

Potentially. Although arbitration is a private proceeding, if an award is entered against you in arbitration and you do not pay it, the prevailing consumer can petition the Superior Court to have the award entered as a judgment. The judgment can then be enforced against your company by having your company’s assets seized or levied upon.

Is There Any Benefit to Arbitration?

Yes. In arbitration, there are no juries. Let’s face it, most juries are made up of consumers and many consumers have an inherent distrust of used auto dealers despite concerted self-policing efforts to improve our image. This bias often works against dealerships in trial. Arbitrators tend to be less biased and focus more on the law than emotion. This is the most prominent benefit of arbitration. Further, because there are no juries, the actual arbitration hearing can tend to be less formal and is handled more efficiently. Thus, an actual arbitration hearing can be shorter than a trial.

Arbitration is also typically faster than the civil system. Smaller arbitration proceedings are usually resolved within a few to several months while civil actions can take over a year to get to trial.

Is Arbitration a Good Decision for Me?

Whether or not you want to force your customers into arbitration is a business decision which should be made with the assistance of an attorney. If you have a defensible case, arbitration is often a good idea as you have a better chance of defending the claims before an arbitrator. If you have exposure, you are probably better suited by settling the case before you have to make the decision about arbitration versus the Superior Court system.

Is Arbitration Cheaper?

Arbitration generally is not cheaper than a civil trial. There are several reasons. Most of your customers will sue you rather than requesting arbitration with the hope you won’t enforce an arbitration clause. This forces you to file a petition to compel arbitration in the Superior Court where your customer sued you, which is costly. If you are a corporation, you must hire a lawyer to represent your company and file the petition.

If you prevail on the petition, the case will be sent to arbitration through an arbitration company, such as JAMS or the American Arbitration Association. The administration fees these companies charge is based on a scale depending on how much is at stake in the case. Further, both sides generally must share the cost of the arbitrator. The arbitrators are often seasoned attorneys or retired judges who charge $250-450 per hour. Thus, the costs associated with the arbitration process are usually far in excess of what you would incur in the Superior Court.

Arbitrations have received a lot of attention lately, especially in light of a recent, landmark U.S. Supreme Court decision. In AT&T Mobility LLC v. Concepcion, No. 09-893, the court held the Federal Arbitration Act pre-empts state contract law principles in determining the enforceability of a class arbitration waivers in arbitration agreements. What this means is you can have a customer sign an arbitration agreement which limits their claims against you to just their individual claims and precludes them from suing you in a class action lawsuit.

Since this decision, several California-based finance companies have launched campaigns to promote the use of the LAW 553-CA ARB retail installment sale contract. This version of the retail installment sale contract includes an arbitration clause which is very business friendly. The fliers sent by the finance companies praise the benefits of arbitration including the fact it is cheaper, there are no lawyers in arbitration and there is no judgment that is entered against you. However, the benefits touted in these flyers are not necessarily accurate.

The Pros and Cons of ArbitrationMINUTELEGAL

BY MICHAEL C . ROGERS, ESQ.Michael C. Rogers is an IADAC Preferred Provider at DealerLegalServices.net. You may reach him at [email protected].

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Identity Theft Prevention A Good Idea

The Red Flags Rule requires many businesses and organizations to implement a written identity theft prevention program to detect the warning signs, red flags, of identity theft in their day-to-day operations. The staff of the Federal Trade Commission has heard from companies that are developing programs from across the country. Their questions, and the FTC’s answers, may help you develop a program for your dealership.

For example, creditors or financial institutions must develop an identity theft prevention program even if they already comply with data security requirements such as the Health Insurance Portability and Accountability Act (HIPAA) or the Gramm-Leach-Bliley Act (GLB). It’s even a good idea for dealers who may not fall under a creditor or financial institution definition.

The FTC strongly encourages reasonable data security practices, but the Red Flags

Rule is not a data security regulation. Good data security practices – such as collecting only the personal information you need, protecting that information, and securely disposing of what you no longer need – help ensure personal information does not fall into the hands of identity thieves. For more information on data security, visit www.ftc.gov/infosecurity.

The Red Flags Rule picks up where data security leaves off. If identity thieves do get hold of someone’s personal information, they typically use it to get goods or services from unsuspecting businesses and have no intention of paying the bill. By having companies set up procedures to look for and respond to the red flags that an identity thief is trying to use someone else’s information, the rule seeks to reduce the damage crooks can inflict both on victims of identity theft and on businesses left with accounts receivable they’ll never be able to collect. While you may be able to incorporate some of your data security practices, your identity theft prevention program is a different kind of plan aimed at preventing a different kind of harm. To read additional FAQs regarding the Red Flags Rule,

visit the FTC’s site on the subject at http://www.ftc.gov/bcp/edu/microsites/redflagsrule/faqs.shtm.

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Online video continues to increase in popularity among auto shoppers. Video brings vehicles to life in a way photos just can’t. Sight, sound and motion make it more emotional and engaging for viewers. As a result, video is a powerful merchandising tool that can help influence shoppers to not just buy your make and model, but to buy it from you.

Video Facts• More than 75 percent of Internet users

watch video online• 50 percent of consumers watch videos

while shopping for a car• 66 percent of car shoppers would watch

more video if it were available • 72 percent of shoppers are more likely to

buy a product or service when a video is used

What You Can DoFirst, let’s talk about where you should

be posting videos online. It’s not just about a video’s content – the key is in the wide distribution of your videos. It doesn’t matter how good the video itself may be if it’s not being seen by auto shoppers.

According to an AutoTrader.com Video Survey, vehicle shoppers say they expect to find videos on dealership sites, manufacturer sites and independent sites such as AutoTrader.com. Therefore, it is critical for automotive advertisers to place video content in front of all potential customers. Don’t forget about video sites like YouTube, too.

Now that you know where you’re going to be posting your videos, let’s talk content.

Do-It-Yourself VideosDo a complete video walk-around. Give

shoppers a sense of what it would be like to drive and own the car.

Keep videos to less than one minute. Shoppers will often lose interest if a video is too long.

State the facts. Include price but keep information objective to avoid a sales pitch.

Include information that cannot be gained from photos. (i.e., warranty, single owner, non-smoker, etc.)

Reinforce the retention of information. Show what you are talking about (i.e., show the odometer while talking about mileage).

Use Pan-and-Scan VideoConsider using pan-and-scan videos.

AutoTrader.com offers a personalized, video solution called FastAds that’s based on this technology. This option allows you to use vehicle photos and easily turn them into a virtual walk-around video, narrated by a

voiceover with a custom script. It’s a very convenient and easy tool that can effectively showcase any vehicle you are trying to sell.

Leverage Manufacturer AssetsYou don’t always have to make a homemade

video to communicate the message. Most OEMs will have video assets available for your use, so use them when you can’t use the other two options I mentioned already, or use them in conjunction with a do-it-yourself or pan-and-scan video. If you are participating in a manufacturer’s certified pre-owned program, it’s a great opportunity to leverage these assets as many manufacturer’s have commercials specifically dedicated to the CPO message.

Merchandise Your Dealership in a Video, Too

So far, we’ve only focused on videos about your inventory, but your online marketing is about much more than the vehicles you sell. Building confidence in your capability as a dealership is just as important in getting shoppers to choose you.

Tell your story. Do a store video tour and highlight amenities and departments. Show customers why you are a dealership they should do business with.

Use customer testimonials videos. Build a strong image for your prospective customer.

Include dealership information. Be sure to incorporate your contact information, website address, map and directions.

Post your videos on a multitude of sites. Include user-generated sites such as YouTube and other social networking sites, as well as your dealership site, independent sites and anywhere else your inventory is listed.

Howard Polirer is the director of industry relations for AutoTrader.com. He has helped train more than 10,000 dealers in over 200 cities across the U.S. on the industry’s best practices to reach automotive consumers. He can be reached at [email protected].

BY H O WA R D P O L I R E R

Telling Your Value Story with Video

DR IV ING TR AFF IC

VIDEO

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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.

ProconGPS, Inc., a global leader in mobile resource management solutions, has announced the acquisition of the patents governing the repossession of automobiles in the vehicle finance industry from CalAmp Corp. of Oxnard, Calif. The intellectual property relates to methods and systems that apply GPS technology, cellular networks and information systems to monitor loan status for a default condition on a vehicle and enable tracking to aid the confiscation and repossession process for dealers and finance companies.

“ProconGPS, Inc. is continuing to invest in its portfolio of intellectual properties and solutions for vehicle finance, fleet management, new auto dealers and overall asset tracking,” said Brian Boling, CEO of ProconGPS Inc. “As the world’s largest subprime vehicle finance asset tracking company, we recognized the need to add these patents to our existing intellectual property specific to financial services and the repossession process our customers use on a daily basis. The method patents involved are all about our core deliverable; risk mitigation. As we continue to witness the significant costs and efficiency advantages our customers gain using our services, ProconGPS, Inc. is committed to continuing the growth of this exciting Vehicle Finance GPS Tracking industry.”

ProconGPS Acquires Repo Patents

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DEALER PROFILES DEALER PROFILE: Dimitry Nikolaev, Quality Pre-Owned Vehicles

One of the many independent dealers on Riverside Avenue in Roseville, Calif., Dimitry Nikolaev has a unique business model that clearly distinguishes him from the others. A dealer since 1998 and owner of Quality Pre-Owned Vehicles, his love for European cars has evolved into a respectable retail sales operation with a very uncommon added service: he is also a business partner with the California DMV.

Nor Cal Reg is the name of the registration business he operates with his wife Oksana at the same location as his retail outlet. There, a dealer or private individual can walk in the front door and complete a vehicle transfer as though he was at a DMV office. Issuing of license plates, stickers and registrations are all done in an instant. Dealers will recognize the value of having a DMV outlet that doesn’t require an appointment or waiting in long lines. Also, because Nor Cal Reg can print new registrations on the spot that include new lienholders, dealers now have the solution for delayed funding from lenders while waiting for proof of lien being recorded. You can contact him for information on transfers at 916-448-8000.

Nikolaev is a car enthusiast with background in finance and insurance and his investment in becoming a DMV partner proves he is in it for the long haul. Quality Pre-Owned Vehicles is an IADAC member.

DEALER PROFILE: Fabian Kako and Eddy Shinoo Enzo Auto Sales

Fabian Kako and Eddy Shinoo founded Enzo Auto Sales in Sacramento in 2007, but theirs is a partnership that has its roots half a world away and decades ago in Iran. Boyhood friends, the pair went to high school in Tehran together. In 2000, they moved to the U.S., Shinoo pursuing work as a chemist in Los Angeles, and Kako moving to Sacramento where his sister lived, and beginning his automotive career as a lot boy with a local dealership.

In 2005, Kako began buying cars and selling cars, and he urged Shinoo to move to Sacramento so they could open a wholesale business of their own. In 2007, Enzo Auto Sales was born, the partners naming their business in honor of automaker Enzo Ferrari.

“Going into business on our own was a scarey step, but we both love cars and figured it was the right move,” remembers Kako.

While the men focus on the wholesale side of the business, they have a full-time salesman who handles retail sales from their warehouse in the Fulton area of Sacramento. Their retail business is growing though customer referrals and an active online presence that includes ads on Craig’s List and Facebook.

Although both attend weekly auto auctions, Kako admits that his strength is in buying vehicles, while Shinoo shines in sales.

“We’ve grown our business in the midst of a difficult economy, but we’ve weathered the dips in the market,” Kako says. “We learned the hard way that the book values change rapidly, so we’ve learned to slow down when we sense that the market is slowing, and not to overextend ourselves. It takes a lot of phone calls to our customers on Monday morning to prepare for the week, and a lot of careful listening to make sure we make the right buying decisions at the auction.”

Enzo Auto Sales is also a new member of IADAC, and both Kako and Shinoo are hopeful their participation in the IADAC meetings will not only give them additional insight into market conditions but will provide them with more tools to help them continue to expand their business.

“We admire the work IADAC does on behalf of dealers like us in keeping the industry strong,” says Kako.

They both are serving as delegates on IADAC’s board of directors.

DEALER PROFILE: Rick Gomez of RJ Auto Brokers

Rick Gomez of RJ Auto Brokers is an example of our new class of modern dealer. Rick deals on a nationwide stage. He and his wife Judy are based in the Sacramento area. They have been a licensed California dealer for over 40 years. We all have the Internet to thank for real-time inventory control. That is just one of the tools Gomez uses and dealers like him are not tied down to the old ways of doing business.

A usual week has Gomez scanning inventory lists form several Western state auctions. He’s mainly in the wholesale end of our industry, so when he discovers a need for certain inventory, Gomez finds it with expertise gained from thinking out of the box.

In addition, Gomez is a current officer on the IADAC executive board. He brings a fresh and inquisitive voice to the table. He likes to shake things up gets us all thinking and has been deeply involved with our association for many years. He has been Quality Dealer of the Year and a multi-year Sacramento local president.

Rick is pictured with Curt Kaesche of Brasher’s Reno Auto Auction. You just don’t know where you will see him next. Rick looks and acts like a 30-something guy with boundless energy. He is an example of a California dealer we could all learn something from. Just ask him, he is always willing to share advice!

Fabian Kako (left) and Eddy Shinoo (right), owners of Enzo Auto Sales, during their weekly visit to Brasher’s Sacramento Auto Auction.

s

He is an example of a California dealer we could all learn something from.

s

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$DEALER PROFILES DEALER PROFILE: Jim Kurkoske and Chris Mulvania, owners of Speedstar Motorsports

Relative newcomers to the retail auto sales industry and recent IADAC members Jim Kurkoske and partner Chris Mulvania have successfully grown their auto sales business in turbulent economic times. Their business has evolved dramatically since their inception in 2008, where the dream of easy sales and huge profits was interrupted by reality. Quickly realizing a need for additional income during the normal ups and downs of retail auto sales, the partners became a retailer for Interceptor Boats, and also carry a line of pre-owned boats.

Chris has a background in custom cars, and Jim has a solid grasp on the financial aspect of sales. Recognizing the transportation needs of hard-to-finance customers, Jim has many lenders available. Clearly visible from the 91 Freeway on a frontage road in Riverside, Calif., they attract attention to themselves due to the frequent slowdowns experienced during Southern California rush hours.

With a great location and a successful business model, Jim and Chris are looking to expand to a second location. Finding the right inventory at the right prices means having to look long and hard, sometimes at auctions out of state. “We make our money on the buy” says Jim. IADAC wishes Speedstar Motorsports continued success.

Westlake Closes $250 Million Securitization with Wells Fargo Securities

Westlake Financial Services, a full-spectrum indirect auto finance company, announces a new $250 million dollar revolving securitization facility with Wells Fargo Securities. The deal closed May 26.

“This latest securitization is another step towards realizing our goal of becoming a programmatic issuer in the market,” says Westlake CFO Paul Kerwin. “Our plan is to issue securitizations this size or larger two to three times per year. Along with our securitizations from last year, we are well on our way to achieving that goal.”

President Ian Anderson says the additional capital will help Westlake achieve its aggressive growth strategy for 2011. “Not only are we increasing our dealer base, we also want to help each of our dealers finance more customers. We do this by offering the most flexible programs with competitive rates that cover the entire credit spectrum,” Anderson says. “We are also putting more feet on the ground and nearly doubling our rep force. This type of growth is possible with the support of financial partners like Wells Fargo Securities.”

Kerwin adds that he is pleased with the recent securitization’s broad-based investor support as well as the efficiency and professionalism of the Wells Fargo Securities team. “I want to commend the Wells Fargo team for a very smooth transaction and flawless execution,” Kerwin concludes.

In related news, Westlake also announced an increase to its revolving securitization facility with Wells Fargo Preferred Capital on April 6. The line was increased from $100 million to $200 million dollars. This is in addition to the existing $365 million facility with Wells Fargo Preferred Capital and three other banks.

•�� 3-YEAR-OLD VEHICLES RISE SUBSTANTIALLY SINCE 2007: Lack of used vehicle supply, from reduced new-car sales in same period.

•�� PRODUCTION DROP HAPPENING DOMESTICALLY AND IN JAPAN: Tornadoes in Southeast US have caused temporary engine plant shutdowns.

• AS INVENTORIES BEGIN TO SHRINK, EXPECT A FEW THINGS TO HAPPEN: New-vehicle transaction prices will rise, and incentives will be scaled back.

•�� AS SUPPLY OF NEW VEHICLES BEGINS TO GET SCALED BACK: Demand spill over to used, putting further upward pressure on used-car values.

•��FUEL-EFFICIENT SEGMENTS VALUES SO FAR THIS YEAR: Up 20% since January, far cry from steady depreciation of 2009 and 2010.

•��TRUCKS AND SUVS HAVEN’T EXPERIENCED BIG GAINS: Strong w/ only slight declines in last month for most fuel-thirsty segments.

•��TWO TRUCK SEGMENTS SEE DROP IN APRIL: Full-size trucks down 2.4%, while full-size SUVs dropped 1.1%.

Used Vehicle ValuesBY J U A N F L O R E S Kelley Blue Book, Director of Vehicle Valuation

Used vehicle values have been increasing across nearly all segment most of this year; Rising gas prices have led to strength in fuel-efficient segments, yet safe to say all used-vehicle values strong through April.

t

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We’ve often heard the phrases “Don’t expect what you can’t inspect” and “Knowledge is power.” These could not be more true than they are today in the dealer controlled financing industry (Buy Here-Pay Here, Lease Here-Pay Here and Rent-to-Own). Knowing how well your dealership and portfolio are performing compared to industry standards and compared to your own historical performance is invaluable. If you don’t inspect it, you can’t track it. If you can’t track it, there is no accountability. If there is no accountability, there is no motivation for change.

As a consultant and trainer to DCF dealers across the nation, I am often amazed when talking with prospective clients about their business results. It is surprising to see

T R E N D S P O T T I N G :

news

--Don Miller

Your data is like gold; mine it often.

how many dealers do not track their own dealership’s key figures – figures that are very relevant at determining the overall health of the lot. The figures these dealers did know were typically as of the previous month’s end-of-the-month reports. They knew last month, or maybe even last year, they collected X amount in payments or booked X amount of profit or sold X number of units. But, they don’t know how those numbers truly compare to previous months, years or even industry standards.

Most dealer management systems provide adequate reports which would enable a dealer to see static results, for example, or how many units sold and average deal structure, current inventory totals and averages, current delinquency and accounts receivable totals and more. However, very few, if any, of these systems provide any type of trend analysis reports. It is up to the dealer to record key figures on a monthly and even weekly basis to perform any meaningful analysis. The term trend analysis refers to the concept of collecting information and attempting to spot a pattern, or trend, in the information.

Having the ability to spot trends can be invaluable to a DCF dealer collecting payments on a weekly basis. Spotting a dangerous trend early enough allows

dealers to take corrective action prior to having a major issue. The trick is to know what to look for.

We have seen dramatic reductions in the average reconditioning expenses at a lot where, it turns out, the manager had been planning to quit and open his own lot. Had this trend not been spotted, the results could have been catastrophic, leaving the new management to deal with a poor performing portfolio with lots of mechanical issues. This dealer was able to set new policies for vehicle inspections quick enough to contain any major issues.

At another location, a dealer was enjoying what appear to be his lot’s typical low delinquency rates; however, because this dealer was also monitoring the staff’s collection effectiveness, he spotted a trend indicating there was a strong possibility of fraud. With some further investigating, this dealer was able to obtain proof of employee theft within just a few weeks. Putting an end to what most certainly could have lasted months had he not been tracking weekly performance.

The first step to take to have the ability to spot these types of trends is to record data. Determine which key figures you want to track and enter those across the top of your page as the column headers. The first column should be for the date and each line or row will start with the date the data is recorded. If you are recording weekly data, pick one day of the week (Friday, Saturday, etc.) and record data as of that day each week. As you continue to enter your information, it won’t take long before you have mounds of valuable data, data that you can now use to spot trends and to aid with forecasting.

You can use a simple ledger card, but this is the 21st century and a spreadsheet will allow for much more flexibility. There are several free options available today on the web; Google Docs (www.docs.google.com), Microsoft Excel Online (www.OfficeLive.com) and Open Office (www.OpenOffice.org). Google and Microsoft each offer a decent basic spreadsheet that can be accessed online and Open Office has a complete one that can be installed on your computer.

Webster defines data as factual information used as a basis for reasoning, discussion, or calculation. Data mining has been defined as the extraction of implicit, previously unknown, and potentially useful information from data. Don’t expect what you can’t inspect. Your data is like gold; mine it often.

Don Miller is a senior consultant and supervisor of Constellation’s DCF Consulting Group, a consulting firm specializing in BHPH start-ups, training, consulting and analytics. For more information, visit www.ConstellationAuto.com/dcf.

BY D O N M I L L E R

Don’t Do Business Without It

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Not too many years ago, California auto dealers found out the hard way not all service contract providers are equal. A few underfunded companies made their way through California, writing millions of dollars in service contracts and then disappearing overnight. That left dealers to settle with their customers and the resulting flood of complaints caused an intervention from the California Insurance Commissioner. Today, a service contract provider must be approved by the commissioner to do business in this state. A smart dealer will make certain the service contract company he chooses has a solid background and is approved for business in California.

Dealers can be certain AUL Corp. is one of those rock-solid service contract providers, and IADAC is pleased to announce long-time supporter AUL is our newest Preferred Provider. The company provider serves the Western U.S. with 25-plus agent representatives in California. AUL recently unveiled a simple-

IADAC Announces AUL Corporation as Newest Preferred Providerto-use, web-based program that will streamline the offering, selling and paperwork associated with their products.

According to Jason Garner, AUL general sales manager, AUL’s mission – from the day it opened its doors – has been to become the premier vehicle service contract administrator in America by any quantifiable measurement of business activity. It believes the way to achieve this is by providing the highest level of service in the industry. AUL consistently invests in dedicated and talented people, infrastructure, and the continued development of its unique proprietary software platform, as well as high-tech processing solutions. Above all, the company never lost track of the fact this business is about relationships with you and with your customers.

Maybe that’s AUL has grown so rapidly from its beginnings as a simple partnership, Associates Underwriting Limited (AUL), Garner said. In 1990, the company was founded by Luis Nieves, creator of the Any Year-Any

Mileage® underwriting concept. By 1993, the company had evolved into AUL Corp. Despite increased competition in the marketplace, the company has managed to preserve our leading position by simply providing excellent service to its clients and their customers, coupled with a strong financial position.

Now is the time to learn more about AUL’s proven tradition of service and what it can do for you. Feel free to come by the Napa Valley office, contact AUL at 800-826-3207 or visit www.aulcorp.com.

Edmunds.com Names Best Bets on Used Autos for 2011

Edmunds.com, the premier online resource for automotive information, released its 15 best used vehicle bets for 2011 in June. A total of 11 makes are represented on the list, with four makes (Ford, Honda, Hyundai and Toyota) each contributing two models.

BY SEGMENT, THE WINNERS ARE: •�Compact�Sedan:�2004-2009�Hyundai�Elantra•Midsize�Sedan:�2004-2009�Nissan�Altima•Large�Sedan:�2006-2009�Hyundai�Azera•Coupe:�2004-2009�BMW�3�Series•Convertible:�2004-2009�Mazda�Miata•Wagon:�2004-2009�Pontiac�Vibe•Compact�SUV/Crossover:�2004-2009�Honda�CR-V•Midsize�SUV/Crossover:�2004-2009�Ford�Explorer�•Large�SUV/Crossover:�2004-2009�Chevrolet�Tahoe�•Minivan/Van:�2004-2009�Honda�Odyssey•Compact�Truck:�2004-2009�Toyota�Tacoma�•Large�Truck:�2004-2009�Ford�F-150�•Luxury:�2004-2009�Infiniti�G35/G37�•Hybrid:�2004-2009�Toyota�Prius•Sport�Compact:�2004-2009�Subaru�Impreza�WRX

A team of Edmunds.com editors assembled the list, which emphasizes the most important criteria to consider when researching and deciding on a used vehicle: reliability, safety, value and availability. Eligibility was limited to vehicles ranging in age from 2 to 7 years.

For more details on Edmunds.com’s selection process and for a brief description of all the cars on this year’s list, visit 2011 Used Car Best Bets at www.edmunds.com/car-reviews/best-used-cars.html.

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Gold Country Casino/Hotel4020 Olive HighwayOroville, CA 95966

800.334.9400www.goldcountrycasino.com

Convention Room Rate $99/night

Friday, October 7, 2011 2:00 Board Meeting 5:00 Hors d’oeuvres & Cocktails 6:00 Dinner & Auxiliary Auction

Saturday, October 8, 2011 8:00 Breakfast 9:00 Guest Speaker10:15 Guest Speaker12:00 Quality Dealer Luncheon

with Guest Speaker

Exhibitor InformationAvailable at

www.iadac.orgor call

916.893.3306

Questions?916.893.3306

43rd Annual Convention

October 7 & 8, 2011Gold Country Casino/Hotel • 4020 Olive Highway • Oroville, CA 95966

Exhibitor & Sponsor Registration

PLEASE RETURN THIS FORM TO IADACPO BOX 343 • ROSEVILLE, CA • 95661

PHONE 916.893.3306 FAX 916.784.0223

Vendors will set up at Brasher’s Sacramento Auto Auction, Manheim San Francisco Bayand North Bay Auto Auction inside the auction arenas. Table tops only; no electricalpower available. Vendors whose products or services conflict with the auto auctions

will be limited to displays at the Main Event at Gold Country Hotel/Casino,on Friday, October 7 and Saturday, October 8.

43rd Annual Convention VENDOR REGISTRATION FOR ENTIRE CONVENTION ............................ $695

VENDOR REGISTRATION FOR OCT. 7 & 8 AT GOLD COUNTRY HOTEL/CASINO ONLY

VENDOR SINGLE ADMITTANCE W/NO DISPLAY OR TABLE TOP (INC. MEALS) ........... $99

Tues. Oct. 4 at Brasher’s Sacramento AA, Wed. Oct. 5 at Manheim S.F. Bay, Thur. Oct. 6 at North Bay AA,Fri. and Sat. Oct. 7 & 8 at Gold Country Casino and all meals for one person.

EACH ADDITIONAL GUEST ............................................................$79 X ____

INCLUDES SHOW DISPLAY, MEALS AND ONE PERSON ................................$299EACH ADDITIONAL GUEST ............................................................$79 X ____

FRIDAY DINNER ............................................. CO-SPONSOR $1000

Sponsorship Opportunities at Gold Country Hotel/Casino

SATURDAY CONTINENTAL BREAKFAST .....................CO-SPONSOR $750SATURDAY QUALITY DEALER LUNCHEON ............. CO-SPONSOR $1000

PINEWOOD DERBY ................................................. SPONSOR $750

TOTAL AMOUNT DUE: $ __________________ (TOTAL OF ABOVE CHECKED CHOICES)

NAME OF EXHIBITOR/SPONSOR:CONTACT PERSON:ADDRESS:CITY, STATE, ZIP

PHONE: FAX:EMAIL:

PAYMENT INFORMATION: CHECK ENCLOSED CHARGE (CIRCLE ONE) VISA MASTERCARD

CARD #

CARDHOLDER NAME EXP. DATE

SECURITY CODE SIGNATURE

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Gold Country Casino/Hotel4020 Olive HighwayOroville, CA 95966

800.334.9400www.goldcountrycasino.com

Convention Room Rate $99/night

Friday, October 7, 2011 2:00 Board Meeting 5:00 Hors d’oeuvres & Cocktails 6:00 Dinner & Auxiliary Auction

Saturday, October 8, 2011 8:00 Breakfast 9:00 Guest Speaker10:15 Guest Speaker12:00 Quality Dealer Luncheon

with Guest Speaker

Exhibitor InformationAvailable at

www.iadac.orgor call

916.893.3306

Questions?916.893.3306


October 7 & 8, 2011Gold Country Casino/Hotel • 4020 Olive Highway • Oroville, CA 95966

Registration Form

IADAC MEMBER: X $99 =

IADAC GUEST: X $79 =

NON-MEMBER: X $129 =

NON-MEMBER GUEST: X $109 =

TOTAL AMOUNT DUE: $

BUSINESS NAME:

ADDRESS:

PHONE: FAX:

EMAIL:

PLEASE RETURN THIS FORM TO IADACPO BOX 343 • ROSEVILLE, CA • 95661

PHONE 916.893.3306FAX 916.784.0223

PAYMENT INFORMATION: CHECK ENCLOSED CREDIT CARD CHARGE A/R

VISA MASTERCARD CARD #

CARDHOLDER NAME EXP. DATE

SECURITY CODE SIGNATURE

BRASHERS SAC A/A

NORTH BAY A/A

PLEASE PRINT NAME(S) AS YOU WOULD LIKE THEM ON NAME BADGE(S)

# PEOPLE TOTAL


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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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