Download - December 2012 Independent Dealer Magazine Issue

December 2012 — Independent Dealer — 1 www.fiada.com

Information and Insight for Florida Used Car Dealers

SINCE 1940

A Publication of theFlorida IndependentAutomobile DealersAssociation

December 2012

PRST STDU.S. POSTAGE

PAIDFULTON, MO

PERMIT NO. 38

www.FIADA.com

Providing turn-by-turn directions to independent dealers for over 72 years.

2 — Independent Dealer — December 2012 www.fiada.comPAID ADVERTISING

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DealerIndependent

MAILING ADDRESS 1840 Fiddler Court Tallahassee, FL 32308 TELEPHONE (850) 385-2712 (800) 237-0448 FAX (850) 385-3251 WEBSITE www.FIADA.com

EXECUTIVE COMMITTEE Christopher Leedom President

Dino Mercurio Senior Vice President

Brandi Noegel Chairman of the Board

David Cox, CMD Secretary

Paul Matton Treasurer

Frank Fuzy Regional Vice President

George Hickey Regional Vice President

Steve Marbais, CMD Regional Vice President

Jim Winterick, Sr. Regional Vice President

Jim Winterick, Jr. Regional Vice President

FIADA STAFF Lisette Mariner Executive Director

Terry Myers Educational Instructor

Sarah Langley Administrative Director

Leah Nash Membership Coordinator

Nicole Lee Development Administrator Amelia Tillman Administrative Assistant

Christy Taylor Editorial/Advertising

POSTMASTER:Send address changes to

FIADA • 1840 Fiddler CourtTallahassee, FL 32308

(850) 385-2712 • Toll Free: (800) 237-0448Fax (850) 385-3251 • www.FIADA.com

The Independent Dealer is a publication of:Florida Independent Automobile

Dealers Association,1840 Fiddler Court, Tallahassee, FL 32308

The magazine is published every month inTallahassee and distributed to Florida new, used,

wholesale and lease/retail car dealers.Advertising rates are available upon request.

The statements and opinions expressedherein are those of the individual authors and do

not necessarily represent the views of Independent Dealer or the Association. Likewise, the

appearance of advertisers, or their identification as members of FIADA, does not constitute an

endorsement of the products or services featured.

ContentsDecember 2012

For members of the Florida Independent Automobile Dealers Association

C O LU M N S & F E AT U R E S

4 President’s Message Christopher Leedom

6 Executive Director’s Message Lisette Mariner

8 Curb the Curbstoners A brief refresher on the proper procedures for turning in a curbstoner.

10 Membership News New, Renewing and Rejoining Members

12 Logged On It’s all about who you know, and at www.FIADA.com making connections with other members has never been easier.

13 Invitation to Dealer Town Hall Meeting and Board Meeting Finance will be the topic of discussion in January so reserve your spot now to attend. Stick around for the Board of Directors Meeting, open to al members.

14 Remember December Terry Myers

16 Standing Up For Dealers FIADA stands up for dealers with judicial action intending to protect lienholder’s rights.

17 Title and Registration Training Take advantage of this new course being offered by the FIADA

20 How to Make Tax Time Work for You The race is on stake a claim on customers looking to use their tax refund towards a used car.

24 Leadership Profile: Paul Matton, Treasurer The FIADA Executive Committee members are dealers just like you who want to give back to the Association. Learn their story and how they want to help you.

22 Introducing the FIADA Gift Membership Program Help reach the goal of increasing membership by sponsoring a new member

26 Legal Round-Up Attorneys Thomas B. Hudson and Nicole Frush Munro update dealers on important federal news and ongoing litigation of importance to dealers.

29 Obamacare: Are You Prepared? Time is ticking to make sure you will be compliant as an employer with the new health care laws.

4 — Independent Dealer — December 2012 www.fiada.com

F R O M T H E P R E S I D E N T

It’s the Most Wonderful Time of the Year!BY CHRISTOPHER LEEDOM, FIADA PRESIDENT

It is that time of year again – the holiday season is upon us! Merry Christmas and a Happy Holiday Season to each of you.

As we approach the final days of 2012 I thought it might be helpful to remind each of us as dealers to begin our year end planning. There is a lot to consider this year – potential tax changes, new regulatory oversight and growth plans for 2013. It is also important to take stock and see what you accomplished this year. For many of the dealers I have the opportunity to speak with it has been a pretty good year.

My message this month is based on something I try to remind myself to do all the time. I have a small card I picked up years ago that says:

“Somewhere on the journey, don’t forgetto turn around and enjoy the view”

As dealers and small business owners we can sometimes get so caught up in serving customers, buying cars, hiring employees and running a business that we truly forget to enjoy it. This holiday season I would encourage you to stop and think about how great it is to have the opportunity to be a dealer-owner, operating a small business and hopefully enjoying life. Enjoy an extra moment with your family or loved ones, have a glass of wine and reflect, or go for a walk and just think about what you have accomplished. I try to remind myself to do this every year and it is amazing when you look back how sometimes problems that seemed insurmountable at the time don’t quite look the same and successes look even larger than they did previously.

I also would encourage us as small business owners to help support our communities this time of year. We

are hosting a major food drive to benefit children in the community. Sure we do things year round but this is an opportunity to really support causes when most people are willing to contribute. Adopt a family, help a customer, find someone less fortunate and do something to help. Do it anonymously and you will find it even more rewarding.

Also, don’t forget about FIADA. As we begin to move forward into a new year remember to help increase our membership ranks. Invite—or even sponsor—a dealership to join. This helps our association stay strong and continue to serve all of us in the dealer community. While we are talking about FIADA I would like to thank Lisette Mariner and her team that works with us all year long and puts forth a tremendous amount of effort to make our association the best it can be.

Finally, set some goals for next year. After you take stock of 2012 think about what you want to accomplish in 2013. What opportunities do you have in front of you? What do you do well? What do you need to improve? How do you make your dealership more successful and profitable? This is a great time to think about what we want to accomplish next year and start to focus our efforts to that end.

In January we will have a town hall meeting and a board meeting in Sarasota on January 18-19th. Come on out and participate in our town hall meeting and if you can join us for the board meeting. I hope to see you there!

Have a great month, Merry Christmas and Happy Holiday Season!

Christopher Leedom,FIADA President


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October 2012 — Independent Dealer — 5 www.fiada.comAugust 2012 — Independent Dealer — 5 www.fiada.com

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E X E C U T I V E D I R E C T O R ’ S M E S S A G E

What the New Year BringsBY LISETTE MARINER, EXECUTIVE DIRECTOR

Recently I had the opportunity to attend the Automobile Dealers Industry Advisory Board Meeting. This meeting includes representatives from

Independent Dealers, Franchise Dealers, the Department of Motorist Services, the Department of Revenue, Insurance and Tax Collectors. We reviewed the many items that were included in last year’s transportation bill which are set to go into effect January 1, 2013. These items include:

• Liensmustbetransmittedelectronically(FS319.24(8))

• Lienholdersshallelectronicallytransmitliensandlien satisfactiontothedepartment.(FS319.27(7))

• Thedepartmentmayadoptrulestoimplementan electronic system for issuing salvage certificates of title

andcertificatesofdestruction.(FS319.30(10))

• Newlicenseplatesarecreatedforveteransofthe Vietnam War and recipients of the Combat Infantry

Badgeuponproofofeligibility.(FS320.13(1))

• Adealerofheavytrucksmaysecureoneormoredealer license plates that are valid for use on vehicles owned

or are in inventory and for sale and are used only for demonstration purposes.

• Amotorvehicleregistrantwhohasrenewedamotor vehicle registration during the advance renewal period

and surrenders the license plate for the vehicle before the end of the renewal period may apply for a refund of thelicensetaxes.(FS320.15)

• Asalvagemotorvehicledealerisexemptfromthe requirements for garage liability insurance and personal

injury protection insurance on those vehicles that cannot be legally operated on road, highways, or streets inthisstate.(FS320.27(3))

• Recreationalvehicledealersmayapplyfortitleonly if the dealer is authorized by a manufacturer agreement Continued on Page 8.

www.fiada.com6 — Independent Dealer — December 2012

to buy, sell or deal in that particular line-make. (FS320.771)

Remember, Auto Data Direct is offering free activation for dealers who sign up for their ELT servicesanddeposit$50inapre-paidaccount.ADD’s web-based ELT service offers volume discounts, an online lien manifest, email and text notification, printable confirmations, integrated paper title requests, and many additional dealer tools. To take advantage of the free activation offer, visithttp://www.ADD123.com and use the promo code FIADAELT when you sign up. Current ADD customers can take advantage of the special offer by entering the FIADAELT promo code under the ELT tab after log-in.

On the 2013 horizon, the department will pursue several items in their legislative package including the option for dealers to have a two year license renewal, the elimination of certificates of repossession, moving the delinquent registration fee to the day it expires instead of allowing the grace period, and the license plate redesign. The department is also in the midst of test piloting a program in the Tallahassee region that helps to find curbstoners. Staff reviews craigslist postings to find curbstoners. Once it is determined that there is a violation, a cease and desist order is sent. If the action is found a second time then an injunction is placed on both the dealer that is committing the offense and the private citizen. Last year the departmentinvestigated904cases.Inthisfirstquarterthedepartmenthaslogged442cases.Regions still investigate complaints, so continue to

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WHAT THE NEW YEAR BRINGS continued from Page 6.


Vehicle Service Contracts I GAP Coverage I Credit Insurance I Lifetime Engine WarrantyLimited Warranty I Dealer Participation Programs I F&I Training I Advanced F&I Technology

Contact Protective’s Florida representative, Chris Behrens at 866 452 7335

A “National Corporate Partner” has met stringent NIADA criteria demonstrating that it can provide valuable products and services to NIADA members. No legal partnership has been created by the granting of this status, but NIADA does receive compensation from Protective. Lifetime Engine Warranty, Limited Warranty, Vehicle Service Contracts (VSCs) and GAP are backed by Lyndon Property Insurance Company in all states except NY. In NY, VSCs are backed by Old Republic Insurance Company. GAP, Lifetime Engine Warranty and Limited Warranty are not available in NY. Credit Insurance is backed by Protective Life Insurance Company in all states except NY, where it is backed by Protective Life and Annuity Insurance Company.

Protect Tomorrow. Embrace Today.™

When you work with Protective you offer customers more than

products; you offer solutions – solutions that allow people to

embrace all today has to offer by protecting their tomorrow.

Protective provides F&I solutions that simplify the selling process

with easy to understand products, advanced training and reliable

customer care and claims service. We are committed to your

profitability by serving the increasing number of car buyers that are

unprotected from the costs of future mechanical expenses.

Like you, we believe in doing the right thing for the customer. Help

your customers protect tomorrow and embrace today with F&I

solutions from Protective Asset Protection.

Learn more at protectiveassetprotection.com/brand

We offer more than products. We offer solutions.

report offenses in your area. See the bottom of this page for a refresher on curbstoning procedures.

Looking ahead, FIADA’s legislative agenda includes the reinstatement of the surrender stops. Remember, just before the annual convention, the department ceased enforcement of the surrender stops. The ability to place a stop on a registration has a great impact for dealers that otherwise cannot find the vehicle. Though it would take time to recover, it enabled the dealer to either obtain a settled amount or the vehicle back into inventory. Based on the respondent to our recent survey, dealers responded this section of the law impacted their business by anywhere from$20,000-$75,000.Thechangesbeingproposedwillhave this section reinstated and also include a remedy for resolve any discrepancies; something that was lacking in the previous version of the law.

The FIADA is working hard to set the groundwork for a wonderfulstarttotheNewYear.Don’tforgettoregistertoattend the first town hall meeting in Sarasota, FL on January 18 at the Leedom Group. Visit www.FIADA.com!

Curbstoned vehicles are a problem for Independent Dealers. Thanks to FIADA legislation that was passed a few years ago, vehicles found in violation

of curbstoning statutes can be towed and removed from the property. The problem is, for now, the only way to get a vehicle removed is by reporting it to the Division of Motor Vehicles. If you see a curbstoned vehicle, follow these instructions on how to file a complaint with DHSMV. Use the attached list of DMV Regional Offices to submit a complaintinwriting(emailispreferred)andprovidethemwith the following information:

• Specificlocationwherevehicleswereorarebeing offered for sale.• Datesthatthevehicleswereorwillbeofferedforsale.• Contactinformationforthepersonfilingthe complaint.• Anyotherdatathatmayaidintheinvestigation,e.g. name and or telephone number displayed on the vehicle.

Upon receipt of the written complaint, the DMV Regional Office will assign a Compliance Examiner to investigate and take appropriate action if warranted. The information can be emailed to the Regional Offices at the following email addresses:

Region 1, Margate ‐ [email protected] 2, Ocala ‐ [email protected] 3, Jacksonville ‐ [email protected],Deland‐[email protected],Orlando‐[email protected] 6, Tampa ‐ [email protected],Tallahassee‐[email protected] 8, Palmetto ‐ [email protected] 9, West Palm Beach ‐ [email protected] 10, Miami ‐ [email protected]

Curb the CurbstonersIf Curbstoners are a problem in your area, take action by reporting them to your DMV Regional Office. Here’s how.

MEMBER BENEFIT OF THE MONTH: Online Reference Material and Resources

As an FIADA member, the information you need is always at your fingertips. Only FIADA members have access to the most comprehensive dealer reference library for Florida dealers including the Dealer Training School Manual, Reposession Manual, Red Flags Rule Templates, Safeguards Rule Information and more. Check it out at www.FIADA.com or scan this code with your mobile device and start learning.


Vehicle Service Contracts I GAP Coverage I Credit Insurance I Lifetime Engine WarrantyLimited Warranty I Dealer Participation Programs I F&I Training I Advanced F&I Technology

Contact Protective’s Florida representative, Chris Behrens at 866 452 7335

A “National Corporate Partner” has met stringent NIADA criteria demonstrating that it can provide valuable products and services to NIADA members. No legal partnership has been created by the granting of this status, but NIADA does receive compensation from Protective. Lifetime Engine Warranty, Limited Warranty, Vehicle Service Contracts (VSCs) and GAP are backed by Lyndon Property Insurance Company in all states except NY. In NY, VSCs are backed by Old Republic Insurance Company. GAP, Lifetime Engine Warranty and Limited Warranty are not available in NY. Credit Insurance is backed by Protective Life Insurance Company in all states except NY, where it is backed by Protective Life and Annuity Insurance Company.

Protect Tomorrow. Embrace Today.™

When you work with Protective you offer customers more than

products; you offer solutions – solutions that allow people to

embrace all today has to offer by protecting their tomorrow.

Protective provides F&I solutions that simplify the selling process

with easy to understand products, advanced training and reliable

customer care and claims service. We are committed to your

profitability by serving the increasing number of car buyers that are

unprotected from the costs of future mechanical expenses.

Like you, we believe in doing the right thing for the customer. Help

your customers protect tomorrow and embrace today with F&I

solutions from Protective Asset Protection.

Learn more at protectiveassetprotection.com/brand

We offer more than products. We offer solutions.

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M E M B E R S H I P N E W S

New Members N O V E M B E R 2 0 1 2

AUTO SALES zONE, LLCLake City, FLSteven Cronin Sponsor: FIADA

BAYSIDE AUTO SALES, LLCWilton Manors, FLWilliam LikasSponsor: Kevin Scott

CAPITAL MOTORS, LLCOrlando, FLTahir Malik Sponsor: Terry Myers

JONES AUTO SALES & SERVICE, LLCSilver Springs, FLPhil CackettSponsor: Kevin Scott

PAPERLESS TECHNOLOGIES, LLCGainesville, FLTommy LaneSponsor: John Cousins

SUAzO MOTOR CARS, LLCJacksonville, FLMiguel SuazoSponsor: Terry Myers

TOP CAR SALESFort Myers, FLBCFernando GomesSponsor: FIADA

TRUST MOTORS, LLCJacksonville, FLKhaled AkkoubSponsor: Lisette Mariner

CARL STRICKLANDClermont, FLSponsor: FIADA

Renewing Members NOVEMBER 2012

40+ Year MembersSouthside Autos, Inc. Orlando, FL

20+ Year MembersCherry Cars, Inc. Ft. Myers, FLFett Motors, Inc. Pinellas Park, FL

10+ Year MembersBC Motor Company, Inc. West Palm Beach, FLBig O’s Northside Auto Sales Interlachen, FLMobility Freedom, Inc. Clermont, FLNaples Motorsports Naples, FLReliable Used Cars, Inc. DeLand, FLWayne Reaves Computer Systems Macon, GAXpress Finance, Inc. Orlando, FL

Under 10 Year MembersCharleston Auto Aucion Moncks Corner, SCCharlotte County RV Center, LLC Port Charlotte, FLCorbin Auto Sales Chipley, FLDan’s Deals on Wheels Auto Sales, Inc. Hollywood, FLFirst Place Auto Sales, Inc. Gainesville, FLFrazer Computing, Inc. Canton, NYGoldstar GPS Knoxville, TNGraham Auto, Inc. Live Oak, FLHH Sales, LLC Jacksonville, FLInternational Auto Group Pompano Beach, FLLiberty Hauling, Inc. Polk City, FLMark One Financial Jacksonville, FLNeal’s Wheels Fanning Springs, FLTom Bush Auto Plex Jacksonville, FLVerde Classics, LLC Boynton Beach, FLWinter Garden Auto Sales Winter Garden, FL

GivE tHE Gift of mEmBErSHip!FIADA President Chris Leedom has challenged FIADA members to recruit at least one new member this year and double the size of the Association. One easy way to do that is by sponsoring the membership for a fellow dealer. If you would like to buy a membership for a new dealer, please call the office at (800) 237-0448.


FIADA is your number one source for advice and information. Technical questions, legal questions, regulatory questions...bring them on!

Our network of industry veterans, professionals and consultants can help you find the answers you are looking for. The best part is, it’s free to FIADA members. Call us anytime at (800) 237-0448!

November 2012 — Independent Dealer — 11 September 2012 — Independent Dealer — 11 www.fiada.comPAID

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www.dealercenter.net/freetrial


You hear a lot about the importance of networking and how sharing information and advice with fellow dealers is one of the best FIADA member benefits. Most networking happens at FIADA meetings, such as the quarterly Board Meetings or the Annual Covention, but now you have the opportunity to connect with fellow FIADA members online, through

www.FIADA.com. It is easy, convenient and just another way your business can benefit from membership.

Last month, we showed you how to update and edit your profile information and how to access the features of your account at www.FIADA.com from the profile menu. This time, we are going to show you how to make connections with other members, how to create sub-accounts for your employees so they may access the benefits of www.FIADA.com

LO G G E D O N

Making Connections and Online Networking

Sign into www.FIADA.com with your username and password. There are two ways you can search for other members to connect with: 1. If you know the name or

business name of who you are looking for, type it into the search window at the top of the page.

2. Click on the Resources menu tab and then click Find an FIADA Dealer. Enter in your searchinformation.Youcando a generic search this way as well by searching for just the city, zip or county and generating a list of dealers that match the criteria.

After your search generates results, click on the name of the member you would like to make a connection with. Click on the icon that says “Connect” to request a connection. A pop-up screen will give you the option to send a personal message to the person you are trying to connect with. Click send request and, similar to adding a friend

Making Connections

on Facebook, your new connection will be sent an email message to ther recorded address notifying them of the request. When you receive a connection request, you will be notified by email in the account listed in your profile

information. Follow the link from the email, or sign in to your www.FIADA.com account and click on the “Connections” tab in your profile menu. Click on the “Received” link at the top of the page and choose to accept or reject the connection.

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1. Search for members by typing in a name, business name or information you know about them.2. Search for members to connect with. Can search for specific cities, zip codes and/or counties.3. Click on a dealer’s profile page and click the “Connect” link to request a connection. The same menu bar will toggle to a communications center when you click on the Connections tab from your profile menu. Manage connections and approve or decline connection requests from here.


FIADA Group rate $189/night. Reserve your room at (888) 421-1442

Don’t Miss FIADA’s Finance Forum & Dealer Panel!Meet with several Prime and Sub-prime Finance CompaniesLearn how to get your deals bought by the lenders who want to do business with you. Let the lenders show you how to get more customers financed and sell more cars.

This finance panel will focus on:Understanding Dealer/Lender agreementsReading and understanding consumer credit reports like a lenderSee how lenders evaluate a dealer’s portfolio performanceThe elements of a dealer agreementStructuring a finance dealDebt to income (DTI) calculationsWhat inventory works best for certain lendersChance to meet with lenders for individual consultations

THIS

TOWN HALL MEETING IS

ABSOLUTELY FREE!Register online at

www.FIADA.com or call

(800) 237.0448


Apply online at www.absolutesurety.com/application

Great Credit? Decent Credit? Bad Credit? See if we can save you money!

Are you paying too muchfor your MVD Bond?

Are you paying too muchfor your MVD Bond?

4314 Edgewater DriveOrlando, FL 32804Local: 407-674-7940Toll Free: 855-689-5106www.AbsoluteSurety.com

Remember December

As a licensed professional you are responsible to keep up with changes that affect

your business and ultimately, your livelihood. Having a set time each year to ‘catch-up’ is a smart move. Remember December and find a time before the end of the month to schedule a review into your calendar. During these days revisit the multiple resources you have accumulated and update yourself and your employees.

While you are reading this article somebody is changing the rules or thinking of changing the rules. Unfortunately, those who change the rules don’t always go out of their way to directly communicate the changes

Scheduling time to explore the things you don’t know about your business is essential for success. Don’t forget to make time for the all important annual review.

BY TERRY MYERS

B A C K T O T H E B A S I C S

to the businesses and people the change affects.

Contact your Division of Motorist Services Compliance Officer and ask what changes they might be aware of and want to share with you. Open the many Web links and search for new dates. Open the many resources available on the Internet. A few are included below. Review your federal requirements to protect your customer’s information. What about the Red Flag Rules, $10,000 cash reporting and Specially Designated Nationalsrequirements?Remindyour employees of how things are to be done here at ABC Auto Sales. Continuing Education requirements

may still need to be met. ‘CE’ is a great resource for updating and gathering valuable knowledge.

A few resources you may want to revisit:

Used Car Rule:www/ftc.gov/bep/edu/pubs/business/autos/bus13.shtm

Florida Department of Financial Services: www.fldfs.com

Florida Department of Revenue: www.myflorida.com/dor

$10,000 cash reporting rule Publication 1544 at www.irs.gov

DMV Procedures Manual and Forms: www.flhsmv.gov/dmv/Proc/

FIADA member website: www.fiada.com

NIADA member website: www.niada.com

We have all heard, “Ignorance of the law is no excuse.” As professionals it is our duty to stay abreast of the laws and rules that affect our business and the customers we serve. MembersoftheFIADA/NIADAare fortunate because membership dollars go toward attorneys, lobbyist and resources to watch and report changes. Awesome information flows constantly to members.

As business owners we take responsibility for the actions of our employees and/or our Independent Contractors. Once you have updated yourself, your are responsible to update-train your employees.To keep yourself and them informed - Remember December!

Terry Myers is an instructor for the FIADA Dealer Training School and owner of Florida Auto Dealer School.

www.absolutesurety.com/application


Contact your nearest ADESA location:

ADESA Jacksonville 904-764-1004Sale day: Thursday

ADESA Ocala352-351-5100Sale day: Friday

ADESA Sarasota941-756-8478 Sale day: Friday

ADESA Tampa813-620-3600Sale day: Monday

MARK OF SERVICE

We wear our commitment to dealers proudly on our sleeves. Count on the Dealer Avenue team for dedicated service at ADESA.

Visit us online at ADESA.com/sell.

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www.adesa.com/sell

16 — Independent Dealer — December 2012

Following the legal panel discussion at the FIADA annual convention in Boca Raton this

past October, I was approached by an attorney that works for a member of the Association to discuss a legal issue that the dealer had relating to repair shop liens. The dealer in question had received notice of intent to sell from a repair shop that was claiming a mechanic’s lien on a vehicle for which the dealer was a lienholder. As many of you know, assertion of mechanic’s liens by repair shops is becoming a growing problem for dealers engaged in buy here/pay here transactions throughout Florida.

As is often the case, the dealer that approached me at the convention had questioned the legitimacy of the lien

and the repair bills in question, so the dealer posted the amount claimed for the repair bills and storage charges with the Clerk of Court. Once the bond was posted, the Clerk of Court issued a legal document to the repair facility advising it that the bond had been posted and instructing it to release the vehicle to the dealer. Generally speaking, under Florida law when personal property is being held pursuant to a possessory lien, the posting of a bond sufficient to cover the amount claimed to be due transfers the lien to the bond and the party holding the property as security for the debt is required to release the property. In the situation at issue in this dealer’s case, the repair facility refused to release the vehicle and sold it to a third party despite the posting of the bond.

Upon learning of the sale, the dealership took legal action against the repair facility and ended up with a Court Order finding the repair facility and its owner in contempt of court for their actions. The Court further held that the contempt could be cured by compensating the dealership for the value of its lien on the vehicle. The repair facility and its owner disagreed with this ruling and sought appellate review of the Court’s decision.

After reviewing the Appellate Court filings, FIADA decided to try and get involved in the appeal because the repair facility was not only attacking the contempt order that had been entered under the facts of its case,

FIADA stands up for dealers with judicial action intending to protect lienholder’s rights.

BY ROB SICKLES

Continued on Page 18.

processing title paperwork correctly translates into faster processing by the tax collector’s office, helping dealers complete deals quickly and efficiently.

in fiADA’s new title & registration training seminar students will use a manual, examples and case studies to help clarify ownership transfer starting with the mco, ‘new’ title through the ‘used’ title. training is hands on and students will get the opportunity to complete their own sample title paperwork. Special $79 rate for fiADA members if you register now.

What is acceptable proof of ownership in florida, other states and/or countries?

When is notarization acceptable/required?

When and how does a lien get added/removed?

Where do i find proof of present and past ownership, odometer readings and brands?

to register, call (800) 237-0448 or go to www.fiADA.com

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upcoming Seminars:orlando, December 21 │ tallahassee, January 25, 2013 │ ft. Lauderdale, february 25, 2013tampa, february 26, 2013 │ orlando, march 4, 2013 │ panama city, April 26, 2013

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but it was also challenging the ability of all lienholders to post bonds and secure the release of vehicles under the Motor Vehicle Repair Act. Because an adverse ruling on that issue would effect all lienholders statewide, FIADA authorized the filing of an Amicus Brief, also known as a “friend of the court” brief, in support of the dealer’s position. The purpose of an Amicus Brief is to afford parties that could be affected by the outcome of a case an opportunity to explain their positions to the court or to support a position taken by a litigant in the case. The only restriction on an Amicus Brief is that it must deal with the facts and issues as framed by the litigants and thus, a party filing an Amicus Brief is prevented from presenting new issues to the Appellate Court.

The repair facility raised numerous attacks on the validity of the Trial Court’s Order, but FIADA’s Brief was limited in that it could only address the ability of a lienholder to post a bond when a repair shop was asserting a mechanic’s lien. In attacking the ability of a lienholder to post a bond to release a motor vehicle, the repair shop attempted to focus the Appellate Court’s attention on the language of the bond provision and the definitions contained within the Motor Vehicle Repair Act. The provision which authorizes the posting of the bond states that only a “customer” may post a bond to secure the release of a vehicle being held to secure payment for repairs. Amazingly, the term “customer” is narrowly defined within the Motor Vehicle Repair Act as “the person who signs the written repair

estimate or any other person whom the person who signs the written repair estimate designates on the written repair estimate as a person who may authorize repair work.”

Applying this definition to the bond provision of the Repair Act would create absurd situations. As we argued in FIADA’s Brief, a strict interpretation of this definition would prevent the registered owner of a vehicle from posting a bond and retrieving possession of his vehicle in the event that he was not the person that delivered the vehicle to the repair shop for repairs and if he was not listed on the repair order as being authorized to agree to repairs. The example used in our Appellate Brief was the situation where the parents of a child with a driver’s license own a vehicle that is dropped off at a repair shop by the child for repairs. The parents, under the interpretation of the statute argued for by the repair shop in the appeal, would not be able to post a bond and secure the release of the vehicle, unless the child listed them on the repair estimate as being authorized to agree to repairs. Surely the Legislature did not intend to preclude owners from retrieving their vehicles in these circumstances. We also argued that this interpretation ignores other areas of the law which allow interested persons to post bonds to secure possession of property being held under a possessory lien.

We also called to the Court’s attention a prior decision which it had made and in which it found that the term

“customer” could not be read to exclude lienholders. When it made this decision, the Appellate Court was interpreting a different portion of the Motor Vehicle Repair Act, however, we argued that the logic should still apply. Specifically the same Appellate Court had held that a repair shop that was trying to recover on a bond posted by a lienholder was limited to the $100 cap on exposure for unauthorized repairs even though it was seeking recovery from the lienholder and not the customer. The Appellate Court reached this decision despite the fact that the limitation within the statue says that the “customer’s” liability is limited to $100 and the statute is silent on a lienholder’s liability for unauthorized repairs. The Court reasoned that to exclude lienholders from those whose liability was capped at $100 would frustrate the purpose of the Motor Vehicle Repair Act.

We are hopeful that the Court addresses the merits of our issue, however, I should point out that there are some unusual circumstances in this appeal which the Appellate Court could find as being a sufficient reason to overturn the trial court’s order. Among these issues are the fact that the lienholder did not obtain court approval prior to posting the bond and the lienholder did not file a lawsuit against the repair facility in order to present the Court with a basis to assert jurisdiction over the repair facility. Because these issues were also raised in the repair shop’s Appellate Brief they could form the basis for the Court to dispose of this case without addressing the issue of whether a lienholder can post a bond.

We will keep you informed of the progress of the case and circulate any opinion rendered by the Appellate Court to all members. If you would like a copy of the Amicus Brief filed by the FIADA or additional information, please contact LisetteMarinerat800-237-0448.

TAKING ON THE BAD GUYS continued from Page 16.

The repair facility was not only attacking the contempt order, but also challenging the ability of all lienholders to post bonds and secure the release of vehicles under the Motor Vehicle Repair Act.

November 2012 — Independent Dealer — 19 www.fiada.com

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Did you know that the average Special Finance customer receives 20% to 30% of their

annualincomeinONEpaycheck?That is the power of tax season. More than $200 billion will be hitting the market in late January.

Nowthesecondquestionthatallindependent car dealers need to ask themselves is “How am I maximizing my ability to cash in?”

Tax season is alive and better than ever. Many dealers are already 8 weeks into the 2012-2013 tax refund selling season. Starting in October, thousands of customers are committing a portion of their tax refund in January for a car that they need in the fall.

Early Tax Season:The4thQuarterprocessincludesgetting the down payment that the customer can afford, starting the weekly or bi-weekly payments, and filling the gap between what the dealer

wants and what the customer can afford when the tax refund arrives after the beginning of the year.

Instead of extending the life of a loan from24to30months(forexample)to compensate for a customer’s low down payment, savvy dealers are banking on tax time, deferring a portion of the down payment, and cashing in come January and February. This is not a zero down promotion or some other dangerous gimmick. This is a great way to put the customer into a vehicle they can afford without breaking the bank ahead of the holidays.

Keep in mind, you are not expecting to make loans or sell cars that you normally would not approve. Tax season is an opportunity to fund the gap between what you want down and what the customer has to put down.

Forinstance,ifyouwant$1,500upfront and the customer only has $1,000 to put down, you can take that

first payment and get the remaining $500whenthetaxrefundarrives.This can help keep your risk in check while helping the customer during this expensive time of year.

This prevents you from having to write the loan with a lower down than you would normally like.

Here is the catch though…once the refund money arrives, you get a second chance to sell. With an averageofnearly$5,000sittinginfront of you, show the customer the benefits of putting down more than theagreedupon$500.

“Wouldn’t your life be easier with $60 per week payments instead of $80?” Play with the numbers. Show the benefits of a higher down.

What is the difference of the customerhas$4,500tospendor$3,800?

It is not too late to begin stealing market share and taking tax refund customers out of the market before the checks start rolling in.

Tax Season Facts:Do you know exactly how much free money is out there for your customers who live paycheck-to-

Your customers are counting on a refund. Make sure you are ready to help them make the most of their money, and maximizing your ability to cash in.

BY CHRISTY TAYLOR

HOW TO MAKE TAX TIME WORK FOR YOU

paycheck? The money you paid out in taxes gets recycled back to your potentialcustomerseveryyear.Youonly get one chance to capitalize and reclaim some of this cash.

The rule of thumb is that a family with 2 or 3 children making $18,000 or less a year will get half of that back as a refund. That comes to $8,000 to $9,000 in refund money, mostly coming from the Earned Income Tax Credit,forincomesupto$48,000ayear.

Nowremember,$18,000istheirreported, taxable income. This does not include last year’s refund, rent assistance, food stamps, or child support. The customer in this example can actually be bringing in up to $30,000.

Back to the tax refund itself, the customer knows this money is coming.Yourdemographicisalreadyplanning on how they are going to spend it. And most of your customers are already spending it, right now, before it even hits their hand.

Money is being borrowed from Mom with the promise of re-payment when the refund arrives. Bills are getting put off with the expectation of catching up in late January. The special finance customer shows their true brilliance and budgeting skills by planning their entire life around this one check. It happens every year.

Successful dealers make themselves the first stop in the customer’s spending spree.

The bottom line is that this windfall is not a surprise to the customer. This is an expected annual payout. As a result, money is borrowed, obligations are made, arrangements are reached, and credit cards get used. Once the tax refund check arrives, thatmoneyisgonewithin24-48hours.

Tax Time Benefits:Don’t forget about collections.

Delinquencies or chronic late-payers are in the same position with their other creditors too. Bet on it that their utility bills, cable, cell phone, and rent are late as well. Tax time is when this is all supposed to be caught up.

Dealers can be the light at the end of the tunnel in such situations. Call your delinquent customers in December to let them know that you have a solution.

Youcanalsonegotiate2nddownpayments or balloon payments. One dealer in Kentucky has found that customers can be very receptive to

making an extra payment of $800 with their tax refund in order to lower their weekly payments.

The Buy Here Pay Here industry is all about relationships, listening to your customer, and providing solutions. Notallcustomersarereceptivetoahelping hand, but think about the ones that are. How much additional cash can you bring onto your lot during tax season without having to replace a single vehicle in your inventory?

Balloon payments, planned or unplanned, give you the ability to lower your risk of repossession by lowering customer payments and shortening customer contract terms.


Lower risk, fewer repos, and fewer costs create higher profits.

W-2 Time:It never fails. Every March and April, a handful of dealers in Tampa start advertising tax season and tax refund specials.

Don’t wait! Only people who owe the IRS money file in April.

W-2s start coming out on January 2nd. The latest date that W-2s arrive shouldbearoundFebruary5th.TheSuper Bowl is a good rule of thumb.

Even though the IRS does not open until mid-January, tax returns can still be filed before then. The second the IRS turns their computer system on,

the first-filers get processed.

Timing is one of the most common misconceptions of tax time. If you wait until late January to start, half of the tax returns will already have been filed.

Contact a reputable tax refund service provider who specializes in automotive retailers. If you miss the boat now, you will have to wait until next year to make up for that mistake.

Written by Chip Wiley is the Marketing Director for Tax Refund Services Tax Max (www.taxmax.com). Contact Email: [email protected]

Keep in mind, you are not expecting to make loans or sell cars that you normally would not approve. Tax season is an opportunity to find the gap between what you want down and what the customer has to put down.

www.fiada.com22 — Independent Dealer — November 2012

“Our dealership has been in business since 1956 and since the GPS craze first came onto the market I have tried many different GPS companies. GoldStar GPS is by far the best solution available. Their devices are the most reliable, their tech support is extremely helpful, and the customer service team is professional and always there when we need them. There is no possible way to have the peace of mind our BHPH dealership needs without GoldStar GPS.”

GoldStarGPS.com ©2012 Spireon, Inc.

Don Owen, OwnerOWEN MOTORS, INC. l Sarasota, FL

KEEP YOUR ASSETS PROTECTEDCALL TODAY: 1-866-655-8825

“GoldStar GPS – We can’t imagine doing business without them.”

INTRODUCING THE FIADA GIFT MEMBERSHIP PROGRAMDuring my acceptance speech, I pledged to increase our FIADA membership by 20%. One way we are working to achieve this goal is through our new FIADA Gift Membership Program.

As an association, our membership is our strength and lifeblood. By choosing to sponsor member for one year,you can introduce a new Florida Dealer to FIADA member benefits like training, networking, and legal counseling while ensuring all of our voices are represented in our legislative efforts. Plus, you will receive a$50.00 discount on your own annual membership. I challenge you to find a friend from the auction or even in your own market, and offer to sponsor their FIADA membership for one year. If we all sponsored one member we would double our membership.

By marching together with FIADA, we will all benefit from a stronger voice and larger legislative presence. To sponsor one Florida dealer’s membership for one year, fill out the form below and return it to FIADA along with a check for $325.00. Your new sponsored member will receive a letter notifying them that they are now members of FIADA.

Thank you for your generosity and support.

Christopher Leedom,FIADA President

I, _______________________________________, of __________________________________

agree to sponsor one year of FIADA membership for ________________________________.(Sponsor Name) (Sponsor Dealership Name)

(New Member Name)

Credit Card Authorization

Name on Card Card Number

Exp Date Security Code Billing Phone

Billing Address City State Zip Code

Authorized Signature X

Return this form to FIADA by mail at 1840 Fiddler Court, Tallahassee, FL 32308 or Fax (850) 385-3251.


“Our dealership has been in business since 1956 and since the GPS craze first came onto the market I have tried many different GPS companies. GoldStar GPS is by far the best solution available. Their devices are the most reliable, their tech support is extremely helpful, and the customer service team is professional and always there when we need them. There is no possible way to have the peace of mind our BHPH dealership needs without GoldStar GPS.”

GoldStarGPS.com ©2012 Spireon, Inc.

Don Owen, OwnerOWEN MOTORS, INC. l Sarasota, FL

KEEP YOUR ASSETS PROTECTEDCALL TODAY: 1-866-655-8825

“GoldStar GPS – We can’t imagine doing business without them.”

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L E A D E R S H I P P R O F I L E

The FIADA Executive Committee is always a unique mix of dealers with different backgrounds, business models, leadership styles and experience. Even though their demographics may differ, they all have at least one thing in common: bringing value to FIADA members. Get to know this group better with a few questions and answers into

their philosophies, outlooks and vision for the future.

Paul Matton has also served as FIADA President in 2007 and on the Board of Directors.

Meet the Treasurer:Paul Matton, Park Auto Mall

What is your history with the auto business?I’ve been in the car business since Moby Dick was a minnow. It has been34yearsandI’veheldeveryposition from sales manager to finance manager to general manager to used car manager--you name it, I’ve done it. I have done just about everything excepting owning a franchise. I am currently the Operations Manager at Park Auto Mall and have been filling in for the GM. I take care of the daily operations of the dealership and service the wholesale operations. I also do buying, selling, whatever it takes to get the job done.

Can you share your best advice for making it in this business?Basically it all boils down to having dedication.Youhavetohavesoliddedication if you are going to do it. I am still working 12 hours a day, 6 days a week, so for a long-term career you need to be dedicated and committed. Even though it is hard work, this is still the best business to be in, I think. The automobile industry paved the way for my children, and my grandchildren and hopefully it will offer me a nice retirement when the time comes. It’s

still a lot of work to stay on top of the game every day, but you have to have that mindset if you want to make it. If you snooze you’re going to lose. I tell everyone to pick up the dollars and forget the pennies, so make sure you are working hard and seeing results. Also, don’t let other people run your business for you; you have to run it and make decisions for yourself. If you have good people to help you, though,itiseasy.Fred(theowneratParkAutoMall)isagoodowner;one of the best car owners I’ve ever known.

What is the best part about being an independent dealer?It gets in your blood. I started over 30 years ago, and by choice, I can’tgetoutofit.Youcantry,butyou can’t. It’s locked in your blood system. It’s almost like a high when the adrenaline gets flowing and you are out there with the competition, taking on challenges. I live for when something comes up gives you a challenge and you have to figure out how to solve it. I love sales, too. Sales is about three things: features, benefits andadvantages.Youhavetogivethecustomer enough info so they will say to themselves, “this guy knows what he’s talking about.” I don’t care if its

cars or a can of green beans, if you are good at explaining the features, benefits and advantages to someone else you will sell it every time.

When did you become a FIADA member, and why did you join?We believe it’s a code of ethics everyone should have. It is always important that your business standards coincide with what an organization is trying to do, and for independent dealers that is FIADA. We try to educate customers and everybody else, even independent dealers, because like I said about the features, benefits and advantages, membership can help you improve yourbusiness.Youshouldwanttobepartners with an organization that will get you somewhere. FIADA has the same values and trustworthy people that you are trying to prove to your customers that you are, so you need your membership as a credential. If you don’t belong, you are telling your


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customer and everyone else that you don’t have ethics or rules or a code thatyouoperateby.Youarejustflying by seat of the pants, and who wants to do business with someone that feels that way? My best advice is to go ahead and write the check for membership, because you may not think you need FIADA now but I guarantee there will be a point somewhere during youcareerthatyouwill.Youthinkyou are all set right now and you are doing everything the right way, but that can all change with one law that’s passed and you aren’t aware of it. Even for the little aggrivations you’ve got, you may need some advice or need to talk to another member and network outside of your area. Youneverknowwhenyou’regoingto have a problem and you need to talk to someone in another part of the state or even the country. When

I was president a few years back I hadthechancetositontheNationalCouncil and meet a lot of other state presidents and other organizations. So now, if we have a problem in Arizona or Texas or wherever, I know who to call. Being a member does pay off. One little question you can get answered by FIADA can end up saving you $100 or $1000.

What are some benefits to being an FIADA member?Networkingandbuildingrelationships with other dealers and vendors can be very helpful for you. Going to convention, I spend most of my time talking to vendors and picking their brains for ideas. If I can bring back one or two ideas and implement them in our business here and it lets me sell one or two more cars a month, then the membership and the trip to convention pays for

itself. If I can sell just two extra cars a month, then it is worth every penny.

Do you feel that being a member of FIADA has contributed to your success? If so, how?It has! When you get involved the behavior breeds behavior, success breeds success. The more you get involved with FIADA the more your behavior changes and now your involved and a part of something that you want to do your best to help out. The knowledge you can pick up from talking to guys who have been in business for 10, 20, 30 or more years is priceless. We’re not reinventing the wheel here by any chance but we sometimes need new ways to think about solving the same old problems. Listening to how other people in different areas or in different situations handle their problems someone else only helps you.

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Here is a monthly collection of selected legislative and enforcement highlights, and a recap of some of the many auto sale and financing lawsuits Hudson Cook,

LLC follows each month. (Note that this column does not offer legal advice. You should consult your dealership lawyer with any legal questions.)

FEDERAL LAWInflation Alert! OnNovember21,theConsumerFinancialProtection Bureau and the Federal Reserve Board published finalrulesamendingRegulationZ(TILA)andRegulationM(ConsumerLeasingAct)byincreasingthedollarthresholdforexempt consumer credit and lease transactions. The Dodd-Frank Act provided that the dollar amount thresholds for TILA and the CLA must be adjusted annually by any annual percentage increase in the consumer price index. Based on the adjustments, TILA and CLA protections generally will apply to consumer credit transactions and consumer leases of$53,000orlessin2013.AlthoughtheDodd-FrankActgenerally transferred rulemaking authority under TILA and the CLA to the CFPB, the Federal Reserve retains authority to issue rules for certain motor vehicle dealers – that’s why they were involved with this. The adjustments to the thresholds will take effect on January 1, 2013.

CFPB’s Report Card. On October 31, the CFPB released its first Supervisory Highlights report. The CFPB will periodically issue a Supervisory Highlights report to inform the public and the financial services industry about its examination program. The CFPB visited banks with more than $10 billion in assets, their affiliates, and nonbank lenders from July 2011 through September 2012. The CFPB reported problems with certain credit and lending disclosures, including creditors increasing credit card limits without notifying co-signers in some instances. In addition, the CFPB highlighted that creditors have reported inaccurate information to credit bureaus. The CFPB also assessed institutions’ efforts to develop and maintain effective compliance management systems.

Dealer Targeted for Privacy Violations. On October 26, the Federal Trade Commission announced that it accepted a final settlement with Franklin’s Budget Car Sales, Inc., a Georgia car dealership, resolving allegations that it illegally exposed the sensitive personal information of consumers byallowingpeer-to-peer(“P2P”)filesharingsoftwaretobe installed on its computer systems. Franklin’s allegedly

compromised consumers’ sensitive personal information by allowing P2P software to be installed on its computer network as well, in violation of the FTC Act, the Safeguards Rule,whichimplementsSection501(b)oftheGramm-Leach-Bliley Act, and the Privacy Rule, which implements Section 503oftheGLBAct.Franklin’salsoallegedlyfailedtoprovideannual privacy notices and failed to provide a mechanism by which consumers could opt out of information sharing with third parties, in violation of the GLB Privacy Rule. The settlement bars misrepresentations about the privacy, security, confidentiality, and integrity of any personal information collected from consumers, and Franklin’s must establish and maintain a comprehensive information security program.

STATE DEvELOPMENTSWe have only one state development to report this month. The Texas Department of Banking and Securities amended thebulkoftherulesinChapter84concerningmotorvehicle installment sales to improve consistency, grammar, punctuation, capitalization, and formatting and to provide clarification, more precise legal citations, and improved references to other state agencies.

LITIGATIONVehicle Buyer in Ordinary Course of Business Has Priority over Floor Plan Lender: A collector of classic automobiles engaged a company to help him locate, buy, sell, and trade cars. The collector bought three vehicles, but they were titled in the company’s name for marketing purposes. After the company defaulted on its floor plan agreement with a bank, it transferred title to the three vehicles to the collector for a nominal purchase price, but continued to store the vehicles for the collector. The bank sued the company and seized the three cars. The collector sued the bank in the U.S. District Court for the Southern District of Ohio, seeking possession of the three vehicles. The collector moved for summary judgment, arguing that he had a superior interest as a “buyer in the ordinary course.” The court noted that a perfected security interest will often prevail over a subsequent motor vehicle purchaser unless the purchaser is a “buyer in the ordinary course of business,” who takes the vehicle free and clear of any lien on the seller’s property. The bank argued that the collector did not fall within the definition of a “buyer in the ordinary course” because he never took possession of the vehicles, and the issuance of the titles occurred only after the company defaulted on its loan obligation. The court disagreed. It found that the statute does

L E G A L R O U N D - U P

A Look At Current Legal IssuesBY THOMAS B. HUDSON AND NICOLE FRUSH MUNRO, HUDSON COOK, LLC

$49.95

Thomas B. Hudson and the Attorneys of Hudson Cook, LLP

Desk BookThe Answer Book forFinance and Insurance Professionals

360 things to know about auto dealer finance

360 things to know about auto dealer finance

The Answer Book forFinance and Insurance

ProfessionalsCar dealers, boat dealers, RV dealers–all businesses that sell personal property on credit–are subject to a bewildering thicket of federal and state laws and regulations. Responsibility for compliance usually falls on the general manager of the dealership or the manager of the “finance and insurance”, or “F&I” department. Sometimes the person responsible for sales and credit compliance has received some training dealing with these legal issues. But sometimes, the person shoved into the deep end of the pool as the compliance officer doesn’t have a clue what he or she is responsible for, and doesn’t know where to start. CARLAW ® F&I Legal Desk Book: 360 Things to Know About Auto Dealer Finance provides a compliance roadmap for “green pea” and seasoned compliance officers alike. Each chapter addresses a topic of crucial interest to dealerships. The topics cover the compliance waterfront, and include: ● The Truth in Lending Act and Regulation Z

● The Consumer Leasing Act and Regulation M

● The Equal Credit Opportunity Act and Regulation B

● The Fair Credit Reporting Act

● The Federal Trade Commission’s Used Car Rule

● Federal Advertising Rules

● The Magnuson-Moss Warranty Act

● Arbitration

● and more . . . Each chapter is authored by lawyers who deal with that chapter’s subject every day and in detail. The authors present their information in an easy-to-follow, Q&A format, with as little “legalese” and as much useful and practical information as possible. The goal each time is to give the reader a solid, basic working knowledge of the topic covered. For years, dealers have needed a source for comprehensive, no-nonsense information on the legal requirements they face. Now they have one that quickly will become their principal resource for credit compliance information:

CARLAW ® F&I Legal Desk Book:360 Things to Know About Auto Dealer Finance.

F&I Legal Desk Book “This new book may be called a ‘guide’ but it’s more likely a ‘bible’ for every dealer, F & I manager, and trainer in the country. A timely and invaluable reference that covers all legal and regulatory touch-points in a dealership’s purchase transaction by a consumer. AFIP’s endorsement confirms that the stable of authors know the ‘rights’ to follow and the ‘wrongs’ to avoid. It is on the recommended list by F&I Magazine.”

Ed Bobit, PublisherBobit Business Media

“Ignorance of the law is no excuse. And given the penalties for violating even one of the many legal obligations facing today’s auto dealer, including stiff fines and even imprisonment, a dealer must be well informed to make sound business decisions. There has never been a reference book for auto dealers and their professional advisors ... until now. This book is extremely well written and easy to read. It should be on the desk of every car dealer. It’s on mine.”

Adam Goldfein, Host of the Nationally Syndicated Talk ShowAutoScoop—The Inside to Car Buying

“If a dealer had to decide between renting an inflatable gorilla for his dealership’s rooftop or purchasing this book for every single sales manager and office manager in the dealership, I hope the dealer would make the business decision that could save him or her thousands of dollars in unnecessary legal fees.... Put the gorilla on hold and insist that every manager read this book and keep it on their desks. I’m making it required reading for every Northwood University Automotive Marketing major.”

Joseph J. Lescota, ChairmanAutomotive Marketing DepartmentNorthwood University

“The F&I Legal Desk Book is the official course text for the AFIP Certification Program. Hudson Cook, LLP, is now the course authority for the applicable state and federal regulations. I can count on one hand the law firms in the United States who could have met our curriculum requirements. The F&I Legal Desk Book will dramatically reduce the time required for candidates to prepare for the 200-question final exam. Hudson Cook, LLP, has made a major contribution to AFIP’s efforts to raise the bar for regulatory compliance and ethical conduct within the F&I trade.”

David N. RobertsonExecutive DirectorAssociation of Finance and Insurance Professionals

“A unique exploration of the Do’s and Don’ts for dealers without the legal maze.”

Charles F. ArrambideAssistant Vice-PresidentUniversal Underwriters Group

Thomas B. Hudson

The Answ

er Book for Finance and Insurance Professionals

F&I Legal D

esk Book

Thomas B. Hudson has practiced consumer vehicle sales, finance and leasing law since 1973. Mr. Hudson chairs the law firm of Hudson Cook, LLP. He is President of CounselorLibrary.com, LLC, and is the Founder and Editor-in-Chief of CARLAW ®, an Internet service that reports auto finance and lease legal developments. He has served as President of the American College of Consumer Financial Services Lawyers, and Chair of the American Bar Association Consumer Financial Services Committee’s Personal Property Finance Subcommittee. He represents the National Automotive Finance Association, Reynolds & Reynolds, auto finance companies, major banks and independent finance companies and many companies who supply services to the auto finance and lease industry. He is a frequent writer and speaker on topics relating to vehicle finance and leasing. He is also author of the book: CARLAW ® ~ A Southern Attorney Delivers Humorous Practical Legal Advice on Car Sales and Financing! Mr. Hudson can be reached at [email protected].

Michael A. Benoit is a partner with Hudson Cook, LLP and the author of “A Dealer’s Guide to Red Flags Compliance,” a comprehensive resource tool to help auto dealers create and maintain their internal Identity Theft Prevention Programs. His practice focuses on the practical application of a wide range of consumer financial services and dealer laws and regulations to the operational realities of auto dealers, finance companies, technology providers and financial services vendors. Mr. Benoit is a member of the DealerTrack Compliance Council, the National Association of Dealer Counsel, and is a regular speaker at industry events, including the NADA Annual Conference, National Vehicle Leasing Association Annual Conference, and numerous other national programs and private client-funded engagements. He is frequent contributor to a number of trade publications and journals, including Auto Finance News and F&I Management and Technology magazine, and was the principal author of the NADA’s Management Guide to Information Safeguarding. Mr. Benoit can be reached at [email protected].

F&I Legal

Third Edition

3rd Edition

Edited byMichael A. Benoit

not necessarily require that the buyer have possession, so long as the buyer has the right to possession, which the collector had. The court then found that the late titling of the vehicles was insignificant because the collector clearly used his own funds to purchase and insure the vehicles and had complete control over the manner in which they were restored. See Hockensmith v. Fifth Third Bank, 2012 U.S. Dist. LEXIS 154036(S.D.OhioOctober26,2012).

Car Buyer Must Show Injuries to Recover against Repossessing Lienholder for Violations of Maryland Law: An individual executed a retail installment sale contract in connection with her purchase of a used car from a Maryland dealership. When the buyer defaulted, the assignee of the contract repossessed the car and sent the buyer a notice stating that the car would be sold by a private sale. The assignee sent the buyer a notice informing her that the car had been sold at a private sale and that a deficiency balance remained. The buyer sued under a number of theories, including that the notices violated state law governing the extension of credit and the Maryland Consumer Protection Act. The U.S. District Court for the District of Maryland dismissed these two counts of the complaint because the buyer did not show any actual injury. While the assignee charged the buyer for the costs of the sale, her payments and proceeds from the sale would not cover the principal of her debt, and the assignee had already promised not to seek a deficiency. The court allowed the buyer to proceed on her breach of contract claim for which no actual damages were required because nominal damages are available for breach of contract.SeeEppsv.JPMorganChaseBankN.A.,2012U.S.Dist.LEXIS153549(D.Md.October22,2012).

Creditor Liable for Non-Compliant Credit Contract and Notice of Disposition: An individual signed a retail installment contract to buy a used truck, with no finance charge. After she stopped making payments, the creditor repossessed and sold the car. The individual sued for violationsoftheTruthinLendingActandNevadalaw.Theindividual claimed that the creditor failed to disclose the Amount Financed and the Finance Charge as required under Regulation Z. Reg. Z requires that the credit contract include a brief description of the Amount Financed, such as “the

amount of credit provided to you or on your behalf,” and a brief description of the Finance Charge, such as “the dollar amount the credit will cost you.” The U.S. District Court fortheDistrictofNevadagrantedtheindividualsummaryjudgment on this claim. The court concluded that the contract’s term “unpaid balance – amount financed” did not sufficiently describe that this amount was the amount of credit provided and that the contract’s term “finance charge” did not sufficiently describe that this amount was the dollar amount the credit would cost the individual, even though the contract provided that the individual would pay no finance charge. The individualalsoclaimedthatthecreditorviolatedtheNevadaversion of the Uniform Commercial Code by failing to use the correct form of notice of disposition. The court granted the individual summary judgment on this claim as well, where it determined that the creditor’s notice of disposition did not include a statement that the individual was entitled to an accountingoftheunpaidindebtedness,asrequiredbyNevadalaw. See Limtiaco v. Auction Cars.com, LLC, 2012 U.S. Dist. LEXIS148474(D.Nev.October15,2012).

Tom ([email protected]) and Nikki ([email protected]) are partners in the law firm of Hudson Cook, LLC. For information, call 410-865-5411, 410-865-5430, or visit www.counselorlibrary.com. Copyright CounselorLibrary.com 2012, all rights reserved. Single publication rights only, to the Association. (10/12) HC# 4849-1314-9969.


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GARAGE LIABILITY & CAR RENTAL SPECIALISTS Obamacare: Are You Prepared?

Landrum Human Resources held a post-election webinar on Health Care Reform earlier this

month and had a record number of attendees participating. Following are their answers to questins asked during the webinar.

If you are an employer with 10 full-time and one part-time employee plus two officers, it seems clear you are under the “50” member equivalent. Why would you continue to supply company health insurance if the employees will, as citizens, have their own coverage now from the government? At the heart of this question is the talent issue. If you are currently offering company benefits it is probably because you need to make these benefits available to be competitive with other employers as you seek to attract and retain the best employees. That likely will not change; in fact, employer sponsored plans may become even more important to employees in the future. There was an increase in the number of employer sponsored plans offered in Massachusetts in the five years after reform was implemented there.

How does this affect Small Business covered under the Service Contract Act as it relates to applicable wage determinations published by the Department of Labor?To the best of our knowledge, there are no specific provisions in the ACA that relate to the Service Contract Act.

Please explain the difference in grandfathered and non-grand fathered plans.Here is a section from the website maintained by the US Department of Health and Human Services that addresses your question:Grandfathered health plans will be able to make routine changes to their policies and maintain their status. These routine changes include cost adjustments to keep pace with medical inflation, adding new benefits, making modest adjustments to existing benefits, voluntarily adopting new consumer protections under the new law, or making changes to comply with State or other Federal laws. Premium changes are not taken into account when determining whether or not a plan is grandfathered. Plans will lose their grandfathered status if they choose

The wait is over, employers have run out of time to examine their new requirements under health care reform laws. Landrum Human Resources answers the questions to help you get ready.

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to make significant changes that reduce

benefits or increase costs to consumers.

Could you discuss the employer mandate fines of $2,000 and $3,000 and how they are calculated?Examining the two penalties in more detail, we’ll first look at the employer who offers no plan at all. If any employee goes to an exchange and receives a subsidy, then the employer is subject to a $2,000 annual penalty for every full-time equivalent employee. The first 30 employees are exempted, so the penalty begins with the 31st full-time equivalent employee.

Continued on Page 30.

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How much is the Inadequate Coverage Penalty?We have two tests to be concerned with. First is the affordability of the plan. If the employee’s portion of the health insurance premium is morethan9.5%oftheirhouseholdincome, the plan is deemed to be unaffordable and the employee would be eligible for the exchange subsidy. The Internal Revenue Service is considering a safe harbor provision that would allow W-2 wages to be used in lieu of household income. Stay tuned. The second test is the adequacy of the coverage. We are awaiting further guidance, but generally speaking if the coverage offered does not provide an actuarial value of at least 60% of the total allowed cost, the plan is deemed to be inadequate and the employer is subject to the penalty. The inadequate coverage penalty is $3,000 multiplied by the number of employees who receive a federal subsidy. This penalty cannot exceed the penalty you would

have paid for not offering coverage at all. The plan must provide “essential health benefits.” States do have some degree of flexibility and are required to submit their list of “essential health benefits” to the federal government. We await further guidance on this issue.

Since the proposed IRS form for Individual Mandate is on a month-by-month basis, what would prevent a person from opting-out of Obamacare while they are healthy and opting-in when they become ill?They would be in violation of the law unless the individual qualified for an exemption.

Some employers are already talking about paying the fines instead of complying. They say it would be cheaper. What are the fines, again, for individuals and for employers?We covered the employer fines above. The individual penalties start small

but increase over time. It is the greater of a flat dollar amount or a percentage of income over the taxpayer’s filing threshold(2014$95v.1%).

The Flexible Spending Amount maximum is $2500 per enrollee, but that is per family as well, right? You couldn’t elect $2500 and your spouse also elect $2500, because it is $5000 max for us as a family, correct?The limit is on a per participant basis. Itisa$2,500limitperparticipant.In this example if your spouse also had a Flexible Spending Account, he couldalsocontribute$2,500.Ifonlyone of you had a FSA, the maximum contributionis$2,500.(www.irs.gov/pub/irs-drop/n-12-40.pdf)

The Landrum HR Blog (landrumhr.com/blog) is designed to keep you updated and informed on current policies and/or changes in the field of Human Resources.

OBAMACARE: ARE YOU PREPARED? continued from Page 29.

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CHRISTOPHER LEEDOMPresidentAutoMaxx

Sarasota, FL(941) 309-1111

DINO MERCURIOSenior Vice President

Independent Credit, Inc.West Palm Beach, FL

(561) 686-8673

BRANDI NOEGELChairman of the Board

Noegel’s Auto SalesStarke, FL

(904) 964-6461

DAVID COX, CMDSecretary

Cox Motors, L.L.C.Lakeland, FL

(863) 686-9300

PAUL MATTONTreasurer

Park Auto MallPinellas Park, FL(727) 639-1112

GEORGE HICKEYRegional Vice President

Bond Auto SalesTampa, FL

(813) 238-7478

FRANK FUzYRegional Vice PresidentCentury Motors of S. FL

Pompano Beach, FL(954) 785-0369

JIM WINTERICK, SR.Regional Vice PresidentGulfstream Motor Credit

Miami, FL(305) 253-2335

STEVE MARBAISRegional Vice PresidentMarbais Enterprises, Inc.

Ocoee, FL(407) 877-7422

JIM WINTERICK, JR.Regional Vice PresidentGulfstream Motor Credit

Miami, FL(305) 253-2335

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