Download - IIADA Dealers Edge Sept/Oct 2012
Regulatory Landscape
Feeling Tougher? Y O U ’ R E N O T A L O N E
Regulatory Landscape
Feeling Tougher?
ADVERTISING OR MARKETING?LEASE HERE-PAY HERE VS. BUY HERE-PAY HERE
FULL-SERVICE AUCTIONS
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PRSRT StandardU.S. Postage
PAIDDALLAS, TEXASPermit No. 2079
V i s i t u s a t w w w . i l - i a d a . o r g
PRSRT StandardU.S. Postage
PAIDDALLAS, TEXASPermit No. 2079
I L L I N O I S 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 NDEALER’S EDGE
SEPTEMBER/OCTOBER 2012
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ChairmanRandy CraseCrase Auto Connection25355 E. Ames St.Channahon, IL [email protected]
PresidentGordon TormohlenTormohlen’s Good People Automotive1800 S. Ihm Blvd.Freeport, IL [email protected]
1st Vice PresidentAnthony FerraroPayless Motorsport13449 S. Pulaski RoadRobbins, IL 60472708-388-2300 [email protected]
TreasurerLori Chignoli-CoraChignoli Auto Sales1850 Essington RoadJoliet, IL [email protected]
SecretaryEric NelsonNelson Automotive Inc.1801 S. BusseMt Prospect, IL [email protected]
Directors:Mark AlcornCarlyle Auto Sales1708 BroadwayRockford, IL [email protected]
Paul GluchowskiTurner Acceptance4454 N. Western Ave.Chicago, IL [email protected]
Melanie BrownChicago Car Auction2731 Belvidere RoadWaukegan, IL [email protected]
Amy Goodnight Lohman Companies 3901 15th St.Moline, IL [email protected]
Alex TovstanovskyPrestige Motor Works Inc.8959 Hanslik CourtNaperville, IL [email protected]
Janette PeakPJP Auto Enterprise3100 S. Douglas Spring!eld, IL [email protected]
For information on how to become a member of IIADA, please contact Bruce Eklund at 800-987-6627 or [email protected].
Board of Directors
SEPT. 12 at the Morton Auto Auction IS RENTAL FOR YOU?
OCT. 16 at the Manheim Arena Auto Auction DEALER MANAGEMENT SYSTEMS
NOV. 15 at the St. Louis Auto Auction COMPLIANCE ISSUES
DEC. 10 in Oak Park at the Training CenterREVIEW OF ALL TRAINING
You Have a Date 2012 Educational and Training Opportunities for IIADAThe educational training is hosted by the Illinois Independent Automobile Dealers Association (IIADA) and includes expert trainers in each !eld, with an opportunity to become a Certi!ed Master Dealer.
FOR INFORMATION, VISIT WWW.IL-IADA.ORG.We have created an education and training program with a mission to promote, educate and advance the independent dealer. We will make available a core of quality education and training opportunities that responds to current dealership needs.
WHAT’S NEW
MAGAZINE CONTENTS
ADVERTISERS INDEX
04 Advertising or Marketing?06 LHPH vs. BHPH10 Credit Reports: What You Need to Know12 Full-Service Auctions16 Online Reputation Affects Sales22 Compliance Overdrive
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION
NIADA HEADQUARTERS:
FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF
The Dealer’s Edge is published bi-monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone (817)640-3838. Periodicals postage paid at Dallas, TX and at additional of!ces. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of The Dealer’s Edge, the Illinois Independent Automobile Dealers Association, or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identi!cation as members of IIADA or NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2012 by NIADA Services, Inc. All rights reserved. Visit the NIADA Web site at www.niada.com. STATE MAGAZINE MGR./SALES EDITOR ART/PRODUCTION MGR. PRINTING Nieman Printing
OFFICEFOR INFORMATION ON HOW TO BECOME A MEMBER OF IIADA, PLEASE CONTACT BRUCE EKLUND
AFC .......................................................Inside Front CoverAlly ................................................................................ 11AutoTrader.com ...............................................Back CoverChase ........................................................................... 18Dodah.com .....................................................................9Dyer Auto Auction ......................................................... 21Insurance Auto Auctions ............................................. 19Lohman Companies ............................Inside Back CoverManheim.com ............................................................. 13Manheim Minneapolis ....................................................5NIADA Certi!ed ............................................................16Nowcom ...................................................................... 15Protective .......................................................................7United Acceptance ....................................................... 17Voisys ........................................................................... 22
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NIADA.TV Now available at www.niada.tv: Building an Effective Dealership Website with Michael D. Jackson
Tracking Devices with Jay Rose
Legislative/Regulatory Scene with Shaun Petersen and panel
Avoiding The Potholes with Ken Shilson
Feel Unstoppable in 60 Minutes with Ruben Gonzalez
NIADA Dealer 20 Groups NIADA’s new 20 Groups program is designed for NIADA’s independent dealers as they do business today in BHPH, retail or both. Take your pro!ts to the next level. Visit www.niada20groups.com
Dr. ColorChip Introduces Systems for DealersDr. ColorChip, a nationwide provider of automotive touch-up paint, has introduced a
new line of commercial automotive paint chip repair systems catered to dealership owners
looking to decrease the cost of cosmetic reconditioning of used car inventory.
Dr. ColorChip now offers an entry-level basic commercial system designed for dealers
with fewer than 40 used car sales per month. It is a customizable 30-color system that
enables small dealerships and dealers specializing in the resale of a particular make of
vehicle to effectively touch up their inventory.
Dr. ColorChip’s standard commercial system is a more comprehensive 80-color system
meant to accommodate a dealer serving from 40 to 100 cars per month. Large dealers,
FKDLQ�GHDOHUV�DQG�DXFWLRQ�KRXVHV�ZLOO�EHQH¿W�PRVW�IURP�WKH�����FRORU�GHOX[H�V\VWHP��ZKLFK�covers the full spectrum of car colors.
�³7KH�RSWLRQ�RI�EULQJLQJ�WKLV�V\VWHP�LQ�KRXVH�LV�H[WUHPHO\�DWWUDFWLYH�DQG�PDNHV�JUHDW�¿QDQFLDO�VHQVH´�WR�GHDOHUVKLSV��'U��&RORU&KLS�FR�RZQHU�GHYHORSHU�'DQ�0F&RRO�VDLG��³,WV�LPSDFW�LV�LPPHGLDWH�±�GULYLQJ�FDVK�WR�WKH�ERWWRP�OLQH�DQG�JHQHUDWLQJ�KLJKHU�SUR¿WV�´)RU�PRUH�LQIRUPDWLRQ��FRQWDFW����������������RU�VDOHV#GUFRORUFKMS�FRP��RU�YLVLW�ZZZ�
drcolorchip.com.
V I S I T W W W. D RC O LO RC H I P. C O M .
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BY BRENT CARMICHAELEXECUTIVE CONFERENCE MODERATORNCM ASSOCIATES [email protected]
T H E Y ’ R E N O T N E C E S SA R I LY O N E A N D T H E SA M E
Advertising or Marketing?
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C O N T I N U E D O N PAG E 8
LHPH vs. BHPH: Should My Dealership Switch?In recent years, the Lease Here-Pay
+HUH��/+3+��PRGHO�KDV�JHQHUDWHG�some buzz in the world of subprime auto
sales – and for good reason.
LHPH is an offshoot of the Buy
+HUH�3D\�+HUH��%+3+��FRQFHSW��EXW�LW�involves a dealer retaining the title to
each vehicle and charging usage fees to
customers. While the difference might
VHHP�VXEWOH�DW�¿UVW��LW�FDQ�UDGLFDOO\�change how the vehicle transaction is
PDQDJHG��WD[HG�DQG�UHJXODWHG�Among the advantages of LHPH:
�'HIHUUHG�VDOHV�WD[���$�IHGHUDO�LQFRPH�WD[�GHGXFWLRQ�IRU�depreciation of your assets.
��,W�GRHVQ¶W�UHTXLUH�D�UHODWHG�¿QDQFH�FRPSDQ\��5)&���Less burdensome regulations.
�Faster repossession times.
� Vehicles can’t be claimed in a
bankruptcy.
Probably the most commonly cited
advantage of switching to a lease
SURJUDP�LV�WKH�DELOLW\�WR�GHIHU�VDOHV�WD[�payment on your vehicles. Instead of
SD\LQJ�VDOHV�WD[�XS�IURQW�±�ORQJ�EHIRUH�you’ve received all of the customer’s
money – you’re allowed to pay the sales
WD[�LQ�LQVWDOOPHQWV��HYHU\�WLPH�\RXU�customer pays you. That lessens your
risk of losing money when a customer
GHIDXOWV��DQG�LW�PDNHV�FDVK�ÀRZ�PRUH�even and manageable.
George Klinke, vice president of
business development for the San Diego-
based company LHPH, LLC, called that
the greatest advantage of the model.
³7KHUH�DUH����VWDWHV�ZKHUH�WKHUH¶V�D�UHDO�FDVK�ÀRZ�LQFHQWLYH�´�.OLQNH�VDLG��“When you buy a car in California,
\RX�SD\�DQ������SHUFHQW�VDOHV�WD[�RQ�WKDW�YHKLFOH��2Q�D���������FDU��you’re paying $1,750. That’s money
that comes out of the dealer’s or the
FRQVXPHU¶V�SRFNHW�WRGD\�´But in California and 31 other states,
GHDOHUVKLSV�FDQ�SD\�WKH�VDOHV�WD[�RQ�each vehicle as payments are collected,
rather than at the lease’s inception.
Additionally, lessors can collect a
VHFXULW\�GHSRVLW��ZKLFK�LV�QRW�VXEMHFW� WR�WD[DWLRQ�
“This is a pool of money where if there
DUH�RWKHU�H[SHQVHV�WKDW�FRPH�XS�LQ�WKH�lease, the security deposit can be applied
DJDLQVW�WKRVH�´�.OLQNH�VDLG�Unless state law mandates otherwise,
WKH�RQO\�XS�IURQW�WD[�RQ�D�OHDVH�LV�SDLG�on the cap cost reduction.
For years, BHPH dealers have
DYRLGHG�LQFRPH�WD[HV�RQ�³SKDQWRP�LQFRPH´�WKURXJK�WKH�XVH�RI�D�UHODWHG�¿QDQFH�FRPSDQ\��$Q�5)&�LV�D�OHJDOO\�separate corporation an auto dealership
HVWDEOLVKHV�WR�KDQGOH�¿QDQFLQJ��RIWHQ�IRU�FXVWRPHUV�ZKR�KDYH�GLI¿FXOW\�REWDLQLQJ�credit from traditional lenders.
Usually, the dealership sells the note
from each vehicle transaction to its
RFC at a discount, eliminating most
RI�WKH�GHDOHUVKLS¶V�SUR¿W�RQ�WKH�VDOH��ZKLFK�ZRXOG�KDYH�EHHQ�WD[DEOH�LQFRPH�even though no payments had yet been
collected from the consumer.
The RFC’s income on the note
SXUFKDVH��KRZHYHU��LV�WD[HG�DV�WKH�payments are collected, avoiding a large
LQFRPH�WD[�RQ�SUR¿WV�WKDW�KDYHQ¶W�EHHQ�earned yet and creating a substantial
FDVK�ÀRZ�DGYDQWDJH��,I�H[HFXWHG�FRUUHFWO\��WKLV�VHWXS�LV�
entirely legal. The IRS has even written
D�JXLGH�IRU�LW��DYDLODEOH�DW�ZZZ�LUV�JRY�EXVLQHVVHV�DUWLFOH����LG ����������KWPO��%XW�WKH�,56�DOVR�H[DPLQHV�5)&V�carefully for evidence that they’re
substantive businesses that remain at
³DUP¶V�OHQJWK´�IURP�GHDOHUVKLSV��UDWKHU�than thinly disguised shell corporations.
One small misstep could place you in
line for an audit.
For dealers wanting to avoid this
FRPSOLDQFH�KHDGDFKH�DQG�WKH�GLI¿FXOW\�
of establishing a legitimate RFC, LHPH
is an attractive option.
%HFDXVH�RI�WKH�LQKHUHQW�WD[�advantages of leasing, it is not necessary
WR�KDYH�D�UHODWHG�¿QDQFH�FRPSDQ\�WR�handle LHPH deals – though dealers
may still choose to keep their RFCs as
a buffer against bad publicity, lawsuits
DQG�¿QDQFLDO�ULVN�Because the dealer is the lessor
and therefore the owner of the asset
�YHKLFOH���KH�FDQ�FODLP�GHSUHFLDWLRQ�over the term of the lease based on IRS
JXLGHOLQHV�DQG�XVH�LW�DV�DQ�LQFRPH�WD[�GHGXFWLRQ��UHGXFLQJ�WKH�RYHUDOO�WD[�ELOO��
Jason Berger, managing partner of AK
Acceptance, an RFC in Pittsburgh, said
LHPH deals are not constrained by the
tougher regulatory requirements that
affect BHPH dealers.
At the federal level, LHPH deals fall
XQGHU�WKH�OHVV�UHVWULFWLYH�5HJXODWLRQ�0�rules that govern auto leasing, rather
than the notoriously tough Regulation Z
rules that govern auto sales. Under Reg
0��D�GHDOHU�LV�QRW�REOLJDWHG�WR�GLVFORVH�an annual percentage rate because there
LV�QR�LQWHUHVW�UDWH�LQ�D�OHDVH�±�MXVW�D�³UHQW´�RU�³OHDVH´�FKDUJH�
The lack of an interest rate also means
you are is not encumbered by state
usury limits. You can impose mileage
overage charges to protect the value of
the vehicle. And if the lessee declares
bankruptcy after starting an LHPH deal,
he won’t be able to avoid repossession
because he never had ownership of the
vehicle.
For the same reason, if a lessee
breaches the contract, there’s no
mandatory grace period to comply with
for repossessions.
³:H�SXOO�WKH�WULJJHU�IDVWHU�´�%HUJHU�said, noting dealerships can technically
repossess a vehicle if a payment is even
one day late – though that might not
be a great way to build goodwill in the
T H E B E N E F I T S FO R T H E D E A L E R , R F C A N D T H E C U S T O M E R A R E R E A L LY C O M P E L L I N G .
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FRPPXQLW\��³0\�WDUJHW�WXUQDURXQG�WLPH�LV����GD\V�IURP�WKH�WLPH�RI�GHIDXOW�>WR�when the car is available to lease again].
With a loan, we’d usually let it go a little
ELW�ORQJHU�´�LHPH has some appeal for
consumers, too. Because they aren’t
paying for full, lifetime ownership of
the vehicle, drivers can normally afford
a better quality automobile than if they
insisted on purchasing. Like the dealer,
customers can usually pay less cash up
front. And when the customer is done
with the car, he can simply return it and
get another car, or become the owner
E\�SD\LQJ�RU�¿QDQFLQJ�WKH�DJUHHG�RQ�residual value.
Klinke said given the choice,
customers should prefer to pay the
security deposit on their lease rather
than a down payment on a loan.
“If the lessee does everything
FRUUHFWO\�´�.OLQNH�VDLG��³KH�FDQ�UROO�WKDW�>VXP@�RYHU�LQWR�D�QHZ�OHDVH�RU�JHW�KLV�PRQH\�EDFN�>DW�HQG�RI�WHUP@�´0DQ\�GHDOHUV�FLWH�WKRVH�UHDVRQV�ZKHQ�
DWWHPSWLQJ�WR�H[SODLQ�WKH�ULVLQJ�QDWLRQDO�interest in the LHPH model. Berger’s
dealership partner had operated on
WKH�%+3+�PRGHO�VLQFH�������EXW�QHYHU�H[SHULHQFHG�WKH�JURZWK�LW�KDV�VLQFH�LW�switched to LHPH.
“Year-over-year, I’ve seen a 73 percent
MXPS�LQ�RULJLQDWLRQV�´�%HUJHU�VDLG��³7KH�SULPDU\�UHDVRQ�IRU�WKDW�LV�OHDVLQJ�´
But before you take the plunge, you
should also consider the challenges
of LHPH.
�$Q�H[SHQVLYH�UHWUDLQLQJ�SURFHVV���It requires more advanced dealer
management software.
��Vicarious liability issues that require
contingent liability insurance.
� Less liquidity than BHPH.
As advantageous as LHPH can be, it
is not a simple change for dealerships
to make. LHPH deals require more
advanced dealership management
V\VWHPV�WKDW�FDQ�SHUIRUP�FRPSOH[�OHDVH�calculations like depreciation schedules
and payments that include rental
FKDUJHV��GHSUHFLDWLRQ�DQG�VDOHV�WD[��Those programs often cost more than
basic deal software.
Allen Lentsch, CEO of Northland
'HDOHUV�DQG�H[HFXWLYH�GLUHFWRU�RI�WKH�Northland Independent Auto Dealers
Association, said there is also some
liability risk involved.
“When you do LHPH, you own the
title of the car, so you can be held
responsible for things your customers
GR�ZLWK�LW�´�/HQWVFK�VDLG��7KDW�LQFOXGHV�causing an accident. The concept is
called vicarious liability.
To be protected against vicarious
liability and the risk of lawsuits, dealers
must purchase contingent liability
insurance, which many turnkey LHPH
solutions provide for their dealers.
The Graves Amendment, passed
E\�&RQJUHVV�LQ�������ZDV�ZULWWHQ�WR�prevent unlimited vicarious liability
lawsuits, but the law has been
challenged frequently. And despite
the Graves Amendment, there is still
potential vicarious liability for the
GHDOHU�OHVVRU�XS�WR�WKH�VWDWH�PLQLPXP�¿QDQFLDO�UHVSRQVLELOLW\�OLPLWV�
Because of that risk, it’s incumbent on
dealers to make certain each lessee has
proper insurance coverage.
“We always make sure a customer
KDV�LQVXUDQFH��MXVW�DV�PXFK�DV�ZH�PDNH�VXUH�WKH\¶UH�NHHSLQJ�XS�ZLWK�SD\PHQWV�´�%HUJHU�VDLG��³:H�GLVDEOH�YHKLFOHV�LI�>D�FXVWRPHU¶V@�LQVXUDQFH�ODSVHV�´�
If you’re a BHPH dealer who sells loan
portfolios to investors, you might have
a tougher time drumming up interest in
your LHPH leases, partially because the
product is less commonly understood.
³6RPH�OHQGHUV�DUH�RSHQLQJ�XS�WR�WKLV�´�Berger said. “From what we see, there
DUH�JRLQJ�WR�EH�PRUH�LQ�WKH�QHDU�IXWXUH�´To dodge potential complications,
many LHPH dealers use consulting
organizations, such as Northland Dealers,
LHPH, LLC and Lease It Own It, to advise
them on compliance issues and provide
training materials, forms and access to
specialized insurance. The services can
assume various levels of responsibility
for a dealer’s compliance with lease
regulations.
LHPH, LLC even goes so far as to adopt
the responsibilities of the lessor, shielding
the dealership from some legal risks.
Before switching, it’s a good idea to
contact some LHPH services to learn the
different approaches and costs associated
with outsourcing LHPH implementation.
:RUNLQJ�ZLWK�H[SHUWV�RI�VRPH�NLQG�FRXOG�be the smartest way to go.
Implementing a LHPH ProgramIf LHPH sounds like the right way
forward for your business, there are a
few things you should focus on right out
of the gate.
“I would recommend to any dealer
to try to set the most accurate residual
>YDOXH@�SRVVLEOH�´�%HUJHU�VDLG��³,I�\RX� do that, you’ll get that vehicle back and
SXW�WKDW�YHKLFOH�EDFN�RQ�WKH�URDG��><RX@�can get eight years out of it and lease it
WKUHH�WLPHV�´However, dealers should also
remember the IRS imposes limits on
how low residual values can be set and
still remain a true lease.
Because dealers should keep leased
YHKLFOHV�LQ�JRRG�FRQGLWLRQ�IRU�WKH�QH[W�lessee, high-maintenance autos are not
recommended for an LHPH program. In
addition to requiring lessees to purchase
comprehensive coverage for their
vehicles, many LHPH dealers package
in a warranty or service agreement so
they’re able to keep their vehicle in
JRRG�VKDSH�ZKLOH�SUR¿WLQJ�IURP�WKH�reconditioning.
Berger said the biggest challenge
for the dealership he works with is
persuading customers – and employees
– to go along with the LHPH plan.
“Your customers need to understand
that the vehicle isn’t really an asset, it’s
DQ�H[SHQVH�IRU�WKHP�´�%HUJHU�VDLG��³$W�WKH�HQG�RI�>D�WKUHH�\HDU�OHDVH@��KRZ�PXFK�ZLOO�WKLV�YHKLFOH�DFWXDOO\�EH�ZRUWK"´
Berger recalled employees at the
dealership he works with took about
two months to get fully used to the
terminology differences between BHPH
and LHPH.
“When you have people who have
EHHQ�VHOOLQJ�FDUV�IRU����RU����\HDUV�DQG�all of a sudden you hand them a new
PRGHO��RI�FRXUVH�WKHUH¶V�D�WUDQVLWLRQ�´�he said. “But when they see how much
this helps us sell cars, they really want to
OHDUQ�LW�´To many dealers, the challenges
involved in switching to the LHPH
model are far outweighed by its rewards.
“I’ve never seen anybody switch
EDFN�´�.OLQNH�VDLG��³7KH�EHQH¿WV�IRU�WKH�dealer, RFC and the customer are really
compelling, and to switch back would
MXVW�EH�D�UHDO�KHDGDFKH�IRU�HYHU\ERG\�´�
BY ALEX BRAUNALEX BRAUN IS MARKETING MANAGER OF AUTOMANAGER, A PROVIDER OF INTEGRATED DEALER MANAGEMENT SOFTWARE, DEALER WEBSITES AND ONLINE VEHICLE MARKETING FOR MORE THAN 25 YEARS. HE CAN BE REACHED AT [email protected].
I I A D A G O L F T O U R N A M E N T - A W A R D S D A Y - T R A D E S H O W C O N T I N U E D F RO M PAG E 6 | LHPH vs. BHPH: Should My Dealership Switch?
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I N T H E I N D U S T RYF E D E R A L T R A D E C O M M I S S I O N G U I D E ( W W W. F T C . G OV )
Credit Reports: What Information Providers Need To Know7KH�)DLU�&UHGLW�5HSRUWLQJ�$FW��)&5$��
is designed to protect the privacy of credit
report information and to guarantee
that information supplied by consumer
UHSRUWLQJ�DJHQFLHV��&5$V��LV�DV�DFFXUDWH�as possible.
If you report information about
consumers to a CRA, you are considered
D�³IXUQLVKHU´�RI�LQIRUPDWLRQ�XQGHU�WKH�FCRA. The responsibilities of information
SURYLGHUV�DUH�H[SODLQHG�KHUH��,WHPV���DQG�5 apply only to furnishers who provide
information to CRAs “regularly and in
WKH�RUGLQDU\�FRXUVH�RI�WKHLU�EXVLQHVV�´�$OO�information providers must comply with
the other responsibilities.
1. General prohibition on reporting
inaccurate information: You may
not furnish information you know
– or consciously avoid knowing –
is inaccurate. If you “clearly and
FRQVSLFXRXVO\´�SURYLGH�FRQVXPHUV�with an address for dispute notices,
\RX�DUH�H[HPSW�IURP�WKLV�REOLJDWLRQ�EXW�VXEMHFW�WR�WKH�GXWLHV�GLVFXVVHG�LQ�item 3.
:KDW�GRHV�³FOHDU�DQG�FRQVSLFXRXV´�mean? Reasonably easy to read and
XQGHUVWDQG��)RU�H[DPSOH��D�QRWLFH�EXULHG�in a mailing is not clear or conspicuous.
2. Correcting and updating
information: If you discover
you’ve supplied one or more CRAs
with incomplete or inaccurate
information, you must correct it,
resubmit it to each CRA and report
only the correct information in
the future.
3. Responsibilities after notice of a
consumer dispute from a consumer:
If a consumer writes to the address
you specify for disputes to challenge
the accuracy of any information you
furnished and if the information is,
in fact, inaccurate, you must report
only the correct information to CRAs
in the future. If you are a regular
furnisher, you will also have to
VDWLVI\�WKH�GXWLHV�LQ�LWHP���Once a consumer has given notice that
he or she disputes information, you may
not give that information to any CRA
without also telling the CRA that the
information is in dispute.
4. Responsibilities after receiving
notice from a consumer reporting
DJHQF\��,I�D�&5$�QRWL¿HV�\RX�WKDW�a consumer disputes information
you provided:
�����You must investigate the dispute
and review all relevant information
provided by the CRA about the
dispute.
�����<RX�PXVW�UHSRUW�\RXU�¿QGLQJV�WR� the CRA.
�����If your investigation shows the
information to be incomplete
or inaccurate, you must provide
corrected information to all national
CRAs that received the information.
�����You should complete these steps
within the time period the FCRA sets
for the CRA to resolve the dispute –
normally 30 days after receipt of a
dispute notice from the consumer.
If the consumer provides additional
relevant information during the
30-day period, the CRA has 15 days
more. The CRA must give you all
relevant information it gets within
¿YH�EXVLQHVV�GD\V�RI�UHFHLSW��DQG�must promptly give you additional
relevant information provided
from the consumers. If you do not
investigate and respond with the
VSHFL¿HG�WLPH�SHULRGV��WKH�&5$�PXVW�delete the disputed information from
LWV�¿OHV�5. Reporting voluntary account
closings: You must notify CRAs
when consumers voluntarily close
credit accounts. That is important
because some information users
might interpret a closed account as
an indicator of bad credit unless it
is clearly disclosed that the
consumer – not the creditor –
closed the account.
6. Reporting delinquencies: If
you report information about a
delinquent account that’s placed
IRU�FROOHFWLRQ��FKDUJHG�WR�SUR¿W�RU�ORVV��RU�VXEMHFW�WR�DQ\�VLPLODU�DFWLRQ��\RX�PXVW��ZLWKLQ����GD\V�DIWHU�\RX�report the information, notify the
CRA of the month and year of the
commencement of the delinquency
that immediately preceded your
action. That will ensure CRAs use
the correct date when computing
how long derogatory information
FDQ�EH�NHSW�LQ�D�FRQVXPHU¶V�¿OH�How do you report accounts you have
charged off or placed for collection?
$�IHZ�H[DPSOHV������A consumer became delinquent on
0DUFK�����������7KH�FUHGLWRU�SODFHG�the account for collection on October
��������In that case, the delinquency began
RQ�0DUFK�����������7KH�GDWH�WKH�FUHGLWRU�placed the account for collection has no
VLJQL¿FDQFH�IRU�FDOFXODWLQJ�KRZ�ORQJ�WKH�account can stay on the consumer’s credit
report. In that case, the date that must be
UHSRUWHG�WR�&5$V�ZLWKLQ����GD\V�DIWHU� \RX�¿UVW�UHSRUW�WKH�FROOHFWLRQ�DFWLRQ�LV�0DUFK�����������A consumer fell behind on monthly
SD\PHQWV�LQ�-DQXDU\�������WKHQ�brought the account current in June
������SDLG�RQ�WLPH�DQG�LQ�IXOO�HYHU\�PRQWK�WKURXJK�2FWREHU������EXW�thereafter made no payments. The
creditor charged off the account in
'HFHPEHU������In that case, the most recent
delinquency began when the consumer
failed to make the payment due in
1RYHPEHU�������7KH�HDUOLHU�GHOLQTXHQF\�is irrelevant. The creditor must report
WKH�1RYHPEHU������GDWH�ZLWKLQ����GD\V�RI�UHSRUWLQJ�WKH�FKDUJH�RII��)RU�H[DPSOH��if the creditor charged off the account
LQ�'HFHPEHU������DQG�UHSRUWHG�WKH�FKDUJH�RII�RQ�'HF������������WKH�FUHGLWRU�must provide the month and year of the
GHOLQTXHQF\�±�1RYHPEHU������±�ZLWKLQ����GD\V�RI�'HF����������������A consumer’s account became
GHOLQTXHQW�RQ�'HF������������7KH�DFFRXQW�ZDV�¿UVW�SODFHG�IRU�FROOHFWLRQ�RQ�$SULO����������&ROOHFWLRQ�ZDV�QRW�successful. The merchant placed
the account with a second collection
DJHQF\�RQ�-XQH���������The date of the delinquency for
UHSRUWLQJ�SXUSRVHV�LV�'HFHPEHU�������Repeatedly placing an account for
collection does not change the date the
delinquency began.
�����A consumer’s credit account became
GHOLQTXHQW�RQ�$SULO�����������7KH�consumer made partial payments
IRU�WKH�QH[W�¿YH�PRQWKV�EXW�QHYHU�brought the account current. The
merchant placed the account for
FROOHFWLRQ�LQ�0D\������Since the account was never brought
current during the period partial
payments were made, the delinquency
that immediately preceded the collection
FRPPHQFHG�LQ�$SULO�������ZKHQ�WKH�FRQVXPHU�¿UVW�EHFDPH�GHOLQTXHQW�
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T E C H N O LO GY A N D N E C E S S I T Y E X PA N D T H E S E RV I C E S O F F E R E D BY AU C T I O N S
Back to the Basics: On the BlockAuto auctions today are full-service
operations with a growing list of options to
keep inventory rolling.
The infusion of the Internet into the
traditional auction business model has been,
DUJXDEO\��WKH�PRVW�VLJQL¿FDQW�FKDQJH�LQ�recent years.
�³7KH�,QWHUQHW�NHHSV�H[SDQGLQJ�DQG�H[SDQGLQJ�´�VDLG�&KDUORWWH�3\OH��RZQHU�RI�Capital City Auto Auction in West Virginia
and president of the National Auto Auction
$VVRFLDWLRQ��1$$$���³,�DWWHQGHG�DQ�DXFWLRQ�recently and the entire lane was not there.
7KH\�VROG�HYHU\�FDU�IURP�D�79�VFUHHQ�´ An increasing number of websites are
emerging with features allowing dealers to
shop for cars across the country without ever
OHDYLQJ�WKH�RI¿FH�IndependentAuctions.com, for instance,
KDV�PRUH�WKDQ��������VHDUFKDEOH�YHKLFOHV�IURP����PHPEHU�DXFWLRQV�DQG�ERDVWV�PRUH�than 41,000 registered dealers on the site.
2Q�DQ\�JLYHQ�ZHHN�VRPH��������YHKLFOHV�DUH�sold. The site contains the inventory, post-
sale reporting and account management
tools to help automotive professionals
buy, sell and research vehicles from
independently owned locations.
$'(6$��ZKLFK�RSHUDWHV����DXFWLRQV�throughout North America, has been
one of the industry leaders in embracing
online auctions.
“Our biggest news as of late was the
DFTXLVLWLRQ�RI�2SHQ/DQH�ODVW�IDOO�´�VDLG�Tom Caruso, ADESA president and CEO
and a recent inductee into the National
Independent Auto Dealers Association
Ring of Honor.
“This industry-leading technology will
KHOS�GHDOHUV�DV�WKH\�H[SDQG�WKHLU�UHDFK�outside of their local markets in the online
PDUNHW��:H�DUH�UHDOO\�H[FLWHG�DERXW�WKH�progress we are making bridging our
physical auctions and our online tool,
ADESA OpenLane, to create a better
EX\HU�H[SHULHQFH�´
Auction OptionsWhile the economic issues of the past few
years have meant fewer vehicles coming to
auction, it has forced auctions to increase
their level of service, Pyle said.
“Volumes are down for the leases and
repos, so auctions have opened up to do
PRUH�RXWVLGH�ZRUN�´�3\OH�VDLG�$XFWLRQV�KDYH�VWHSSHG�XS�ÀRRUSODQQLQJ�±�
providing the inventory loans that are
D�SULPDU\�VRXUFH�RI�¿QDQFLQJ�IRU�GHDOHUV�WR�purchase inventory to then resell, either from
the showroom or in a wholesale format.
Post-sale inspections have become an
H[SHFWHG�IHDWXUH�DW�DXFWLRQV�WR�JLYH�GHDOHUV�assurance and peace of mind for both their
in-lane and online wholesale purchases.
“A dealer purchasing a post-sale
inspection has assurance that the vehicle
purchased passed a rigorous test, was
properly represented by the seller and that
Perry’s Auto Auction guarantees that the
YHKLFOH�PHHWV�WKH�GHDOHU¶V�H[SHFWDWLRQV�´�noted an item on the website of Perry’s Auto
Auction in central Georgia.
0RVW�DXFWLRQV�ZLWK�SRVW�VDOH�LQVSHFWLRQV�follow a checklist of items that would cost
$500 or more each to repair or replace. That
includes checking the frame or unibody for
structural damage as well as checking the
paint, transmission, air conditioning system
and brakes. They also check for things like
RGRPHWHU�YHUL¿FDWLRQ��ÀRRG�LQVSHFWLRQ�DQG�emission control.
Often there’s nothing mechanically wrong
ZLWK�D�YHKLFOH�±�LW¶V�MXVW�GLUW\��%XW�WKDW¶V�OK, because many auctions are trumpeting
reconditioning packages for dealers.
At the Greater Erie Auto Auction, serving
Buffalo, N.Y., Cleveland and Pittsburgh,
D�����³IXOO�GHWDLO´�FRPHV�ZLWK�DQ�H[WHULRU�ZDVK��HQJLQH�FOHDQ��H[WHULRU�EXII��LQWHULRU�clean and tire dressing. At a minimum,
they’ll wash it for $10.
Auctions also offer around-the-clock
security for safe vehicle drop-offs, car title
YHUL¿FDWLRQ�DQG�WUDQVSRUWDWLRQ�RI�YHKLFOHV�“Some of our dealers are heavily
dependent on these truckers delivering the
cars to the auctions, and over time the gas
ELOO�DGGV�XS�´�3\OH�VDLG�
Dealer Reaction5RJHU�0RQWEOHDX��RZQHU�RI�&KHOPVIRUG�
6WUHHW�$XWR�6DOHV�LQ�/RZHOO��0DVV���EX\V�cars at auction weekly. He’ll typically shell
out money for the post-sale check his local
DXFWLRQ�RIIHUV�DV�DQ�H[WUD�VHUYLFH�“Good cars are not as plentiful as they
XVHG�WR�EH�´�0RQWEOHDX�VDLG��³$�ORW�RI�SHRSOH�mask these vehicles that come through.
We need someone who can give us a
FHUWL¿FDWLRQ��3HRSOH�DUHQ¶W�DV�IRUWKULJKW�DV�ZH�ZDQW�WKHP�WR�EH�´
If the cars he brings to the auction do
QRW�VHOO��0RQWEOHDX�VDLG��KH�DSSUHFLDWHV�WKH�DXFWLRQHHUV�ZDVKLQJ�LW�EHIRUH�WKH�QH[W�scheduled date.
Stanley Thompson, owner of First Auto
Sales in Bradenton, Fla., visits the auction
DERXW�WKUHH�WLPHV�D�PRQWK�DQG�VHOOV����WR����cars per month.
“Auctions give you a greater selection at
competitive prices you can’t get anywhere
HOVH�´�7KRPSVRQ�VDLG�Still, the new lineup of auction services
KDV�QRW�H[DFWO\�ZRQ�KLP�RYHU�³:H�GR�HYHU\WKLQJ�LQ�KRXVH�´�VDLG�
7KRPSVRQ��ZKR�KDV�EHHQ�LQ�EXVLQHVV�IRU����\HDUV��³:H�NQRZ�ZKDW�ZH¶UH�GRLQJ�´
Indeed, as much as auctions keep
working to enhance their services, some
dealers would still rather do without.
In fact, some avoid auctions altogether,
choosing to get their inventory from
other sources.
Jay Iverson, manager of Carz Central
in Estherville, Iowa, is not a fan of
auctions, period.
“Other than the fact that the cars are
there, there’s not a whole lot I like about
DXFWLRQV�´�,YHUVRQ�VDLG��³7KHUH¶V�D�ORW�RI�politics involved. The rules keep changing.
7KHUH¶V�QR�FRQVLVWHQF\�´David Shoffner, owner of David Shoffner‘s
Auto Sales in Redding, Calif., visits the
auction twice a week. He likes the guarantee
that the title is always good.
“Whereas buying them off the street,
\RX�GRQ¶W�NQRZ�ZKDW�\RX¶UH�JHWWLQJ�´�Shoffner said.
0XFK�KDV�FKDQJHG�VLQFH�6KRIIQHU�VWDUWHG�VHOOLQJ�FDUV�ZLWK�KLV�GDG�LQ�WKH�HDUO\�����V��He said he prefers an old-school method of
buying cars. He is not impressed with online
auctions – he’d rather go in person.
“I pretty much cherry-pick the auctions
WR�¿QG�ZKDW�,�OLNH��DQG�LW�DOORZV�PH�WR�PDNH�D�JRRG�OLYLQJ�´�6KRIIQHU�VDLG��³,�bought two or three cars from the Internet
DQG�LW�ZDV�D�KRUULEOH�H[SHULHQFH��7KH�FDUV�required mechanical work that was not
previously disclosed.
“As for me, I like to see them and touch
WKHP�¿UVW�´To be sure, online auto auctions come
with risks.
Similar to the other popular scams,
.ULVWLQ�-XGJH��H[HFXWLYH�GLUHFWRU�RI�WKH�Trusted Purchasing Alliance, a division of
WKH�QRQSUR¿W�&HQWHU�IRU�,QWHUQHW�6HFXULW\��said there are two central themes to keep
in mind when dealing with auto auction
fraud: First, if an offer seems too good to
be true it probably is, and second, never
send money to someone you have not met
in person, though that might not always be
a practical rule for dealers to follow with
online auctions.
,Q�������WKH�IHGHUDO�JRYHUQPHQW¶V�,QWHUQHW�&ULPH�&RPSODLQW�&HQWHU��ZZZ�LF��JRY��UHFHLYHG�������FRPSODLQWV�IURP�YLFWLPV�RI�DXWR�DXFWLRQ�IUDXG��7KH�WRWDO�¿QDQFLDO�
C O N T I N U E D O N PAG E 1 4
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cost to those victims was more than $8
PLOOLRQ��ZLWK�WKH�DYHUDJH�ORVV�EHLQJ��������per victim. The calls reporting the scams
averaged two per hour.
“Criminals misrepresent themselves as
either Kelley Blue Book agents, or possibly
a person moving out of town and needing to
VHOO�D�FDU�TXLFNO\�EHIRUH�WKH\�OHDYH�´�-XGJH�said. “Like other scams, the criminal sets up
a persona that helps him appear legitimate.
The price for the vehicle is usually at a great
discount, too good to pass up.
“When a buyer shows interest in the
vehicle, he is asked to send a deposit to a
third party to hold while the inspection
takes place. Unfortunately, there is no
legitimate third party. Once the scammer
collects the deposit, the victim is left
ZLWKRXW�KLV�PRQH\�RU�D�FDU�´
Auction ProjectionsThe future of auto auctions will place
a continued focus on manipulating
WHFKQRORJ\�WR�EHQH¿W�GHDOHUV�“We continue to make investments in
our auction infrastructure to facilitate
RXU�EX\HUV¶�GLYHUVH�EXVLQHVV�QHHGV�´�ADESA’s Caruso said. “That includes
more computer terminals for customers
to use, better Wi-Fi access and more
reconditioning options both presale and
post-sale. We will continue to evolve our
business to meet the demands of our
GHDOHUV�´2QH�H[DPSOH�LV�$'(6$¶V�QHZO\�UHOHDVHG�
dealer application for the iPhone.
“The app combines relevant industry
guide books, vehicle history reports and
other useful business data with the cars
UXQQLQJ�DW�RXU�DXFWLRQV�´�&DUXVR�VDLG��“The evolution of mobile technology will
FRQWLQXH�WR�VKDSH�KRZ�ZH�GR�EXVLQHVV�´The new auto auction services have put
the technology companies that develop those
services in the driver’s seat. In July, vAuto,
an Oakbrook, Ill., company specializing
in dealer support services and a wholly
owned subsidiary of AutoTrader Group Inc.,
announced the acquisition of Auction Genius,
a web-based software solution for auto
dealers buying vehicles at auction.
“This acquisition advances vAuto’s
mission to help dealers become more
HI¿FLHQW�DQG�HIIHFWLYH�XVHG�YHKLFOH�UHWDLOHUV�´�Y$XWR�IRXQGHU�'DOH�3ROODN�VDLG�
With Auction Genius, vAuto promises to
HOLPLQDWH�WKH�LQHI¿FLHQFLHV�DQG�GLI¿FXOWLHV�dealers encounter every day as they
evaluate and purchase used vehicles from
wholesale auctions.
“Today, every dealer relies on wholesale
DXFWLRQV�IRU�XVHG�YHKLFOHV�´�$XFWLRQ�
Genius president and co-founder Todd
Kinzle said. “This highly competitive
environment requires dealers to evaluate
far more vehicles than they used to, and
the time it takes to do the proper research
LV�RYHUZKHOPLQJ�´Enter Auction Genius. Kinzle says
dealers can now analyze as many as 10
times the number of vehicles and zero in
RQ�WKH�³ULJKW´�FDUV�ZLWK�VLJQL¿FDQWO\�PRUH�VSHHG�DQG�HI¿FLHQF\�
Typically dealers will use multiple
systems and tools to create used vehicle buy
lists, match the lists with cars scheduled to
be sold at wholesale online auctions and
JDWKHU�FRQGLWLRQ�PDUNHW�YDOXDWLRQ�UHSRUWV�to assess individual vehicles for potential
purchase. They also access live online
auctions through a separate system to buy
WKH�FDUV�WKDW�¿W�WKHLU�SXUFKDVH�SDUDPHWHUV��It’s a piecemeal process.
Auction Genius also integrates with a
growing list of industry partners, including
CARFAX, AutoCheck, NADA Guide Book,
Black Book, Kelley Blue Book and Galves.
Current auction integration includes
0DQKHLP�6LPXOFDVW��29(�FRP��0DQKHLP�PowerSearch, ADESA LiveBlock and
OpenLane.
BY JASON ROBERSON
I I A D A G O L F T O U R N A M E N T - A W A R D S D A Y - T R A D E S H O W C O N T I N U E D F RO M PAG E 1 2 | Back to the Basics: On the Block
M A R K E T I N G N E W S
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EXLOGV�VXSSRUW�IRU�FXUUHQW�VXFFHVV��Deliver on your promises: $FWLRQV�FRXQW�
IDU�PRUH�WKDQ�ZRUGV��VR�SURYH�ZKDW�PDWWHUV�WR�\RX�ZLWK�HYHU\�HQJDJHPHQW��HYHU\�FXVWRPHU�DQG�HYHU\�VDOH��7KH�FODLPV�\RX�PDNH�DERXW�ZKDW�GLVWLQJXLVKHV�\RXU�GHDOHUVKLS�FDUU\�D�ORW�PRUH�ZHLJKW�ZKHQ�WKH\¶UH�EDFNHG�XS�LQ�WKH�LQWHUDFWLRQV�WKDW�KDSSHQ�PLQXWH�E\�PLQXWH�
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Details, details:�7U\�WR�WKLQN�DERXW�WKH�GHDOHUVKLS�H[SHULHQFH�IURP�D�FXVWRPHU¶V�SHUVSHFWLYH��7KH�OLWWOH�GHWDLOV�RI�HDFK�SKRQH�FDOO�RU�YLVLW�DUH�FULWLFDOO\�LPSRUWDQW�LQ�VKDSLQJ�WKH�LPSUHVVLRQ�YLVLWRUV�WDNH�DZD\�IURP�DQ\�FRQWDFW�
It’s all connected:�$XWKHQWLFLW\�PDWWHUV�HYHU\ZKHUH�\RXU�GHDOHUVKLS�KDV�D�SUHVHQFH��7KH�FXVWRPHUV�ZKR�VHHP�WR�GLVDSSHDU�DUH�VWLOO�PDNLQJ�ZDYHV�DQG�LQÀXHQFLQJ�\RXU�UHSXWDWLRQ�ORQJ�DIWHU�WKH\¶YH�OHIW�WKH�SUHPLVHV��:KDW�KDSSHQV�RQ�WKH�VKRZURRP�ÀRRU�DQG�LQ�WKH�¿QDQFH�GHSDUWPHQW�WRGD\�ZLOO�DVVXUHGO\�EH�UHÀHFWHG�VRPHGD\��VRPHKRZ��LQ�D�FRQYHUVDWLRQ�RQOLQH�RU�LQ�SHUVRQ�ZKHUH�\RX�GRQ¶W�KHDU�LW�
You can only run today’s race today: /HWWLQJ�JR�RI�WKH�SDVW��ZLQV�DQG�ORVVHV�DOLNH��LV�WKH�EHVW�ZD\�WR�IUHH�XS�HQHUJ\�WR�IRFXV�RQ�WRGD\¶V�FKDOOHQJHV��/HDUQ�IURP�ZKDW�ZRUNHG�DQG�ZKDW�GLGQ¶W��EXW�JUHHW�HDFK�QHZ�FXVWRPHU�ZLWK�IUHVK�DQG�IXOO�LQWHQW�WR�FUHDWH�D�ODVWLQJ�asset.
Remember the team: *RRG�VSRUWVPDQVKLS�LV�DSSHDOLQJ��$FNQRZOHGJLQJ�DOO�WKH�SHRSOH�ZKR�PDNH�\RXU�GHDOHUVKLS�VXFFHVVIXO�LV�DV�UHOHYDQW�DV�WKH�FDUV�DQG�GHDOV�WKHPVHOYHV��)URP�WKH�PDQXIDFWXUHUV�WR�WKH�VHUYLFH�SHUVRQQHO��\RXU�WHDP�PHULWV�UHVSHFW�DQG�DSSUHFLDWLRQ��7KH\�ZLOO�DSSUHFLDWH�WKH�UHFRJQLWLRQ��WRR��+DSS\�HPSOR\HHV�ZLOO�ZRUN�KDUGHU�DQG�DUH�PRUH�OR\DO��:KLOH�\RX�PLJKW�QHYHU�VWDQG�RQ�D�SRGLXP�
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JROG��
BY JIM FITZPATRICKJIM FITZPATRICK IS PRESIDENT/CEO OF FITZPATRICK ADVERTISING, A FULL-SERVICE AUTOMOTIVE ADVERTISING AGENCY, AND FOUNDER OF FORCE MARKETING, A DIGITAL AND DIRECT MARKETING COMPANY. FOR MORE INFORMATION, CALL 1-800-917-8637, EMAIL [email protected] OR VISIT FITZPATRICKADVERTISING.COM.
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T H E D E A L E R ’ S E D G E SEPTEMBER/OCTOBER 2012
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How Your Online Reputation Affects Sales C R E D I B I L I T Y I S T H E M O S T I M P O R TA N T PA R T O F A N Y D E A L E R S H I P ’ S SA L E S .
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BY PETER MARTINPETER “WEB DOC” MARTIN IS PRESIDENT OF CACTUS SKY COMMUNICATIONS. HE CAN BE REACHED BY CALLING (941) 756-1932 OR E-MAILING [email protected]. FOR MORE INFORMATION, VISIT WWW.CACTUSSKY.COM AND CLICK ON “REPUTATION BUILDING”
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M A R K E T N E W S
Report: Expect to See More Hybrids([SHFW�WR�VHH�PRUH�K\EULGV�FUXLVLQJ�
DURXQG�WKH�ZRUOG¶V�KLJKZD\V�LQ�WKH�QH[W�few years.
According to market research report
distributor ReportStack.com, the global
K\EULG�FDU�PDUNHW�LV�H[SHFWHG�WR�JURZ�DW�D�UDWH�RI�������SHUFHQW�RYHU�WKH�QH[W� three years.
The cause for the potential double-digit
growth: increasing global oil consumption,
the report, titled “Global Hybrid Car
0DUNHW�����������´�H[SODLQHG��0RUHRYHU��DV�JRYHUQPHQWV�DURXQG�WKH�
world try to cut down on fuel emissions,
the hybrid car market has “been
witnessing an increase in initiatives by
governments to create awareness and
DFFHSWDQFH�RI�K\EULG�FDUV�´�WKH�UHSRUW�VDLG�The report also cites labor arbitrage,
such as the various advantages offered
by the hybrid car to the end user, such as
HQHUJ\�HI¿FLHQF\��OHVV�SROOXWLRQ��EHWWHU�performance, reduced dependency on
natural resources and more, as reasons for
WKH�K\EULG�PDUNHW�H[SDQVLRQ��That said, even with the push from
politicians, the high cost of hybrid cars is
acting as a barrier to the market growth,
the report said.
‘’With the time and research on the
development of the battery systems of
hybrid cars, the overall cost of batteries
DQG�WRWDO�FRVW�RI�RZQHUVKLS�ZLOO�GHFUHDVH�´�an analyst from the publishing automotive
WHDP�VDLG��³%\�������WKH�WRWDO�FRVW�RI�ownership of plug-in hybrid electric
vehicles with a battery of 10 kilowatt-
hours will be below that of an internal
FRPEXVWLRQ�HQJLQH�YHKLFOH��DQG�E\�������the total cost of ownership of plug-in
hybrid electric vehicles with a battery of
15 KWh will be lower than an internal
combustion engine vehicle.
“The total cost of ownership of battery
electric vehicles will be less than an
internal combustion engine vehicle by
�����ZLWK�WKH�GHYHORSPHQW�RI�EDWWHULHV��This reduction in cost will fuel the growth
RI�WKH�JOREDO�K\EULG�FDU�PDUNHW�´:KR�ZLOO�EHQH¿W�PRVW�IURP�WKLV�
potential growth?
The vendors currently dominating the
hybrid market space include Toyota
0RWRU�&RUS���+RQGD�0RWRU�&R���)RUG�0RWRU�&R���DQG�1LVVDQ�0RWRU�&R��/WG��� the report noted.
*HQHUDO�0RWRUV�&R���%0:�$*�DQG�9RONVZDJHQ�*URXS�DUH�DOVR�H[SHFWHG�WR�SOD\�D�UROH�LQ�WKH�IXWXUH�IXHO�HI¿FLHQW�vehicle market.
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3D\1HDU0H��WKH�FDVK�WUDQVDFWLRQ�QHWZRUN��KDV�ODXQFKHG�3D\1HDU0H�Lending, a cash payment system for
subprime lenders, and has teamed with
Westlake Financial Services to integrate
3D\1HDU0H¶V�WHFKQRORJ\�LQWR�H[LVWLQJ�systems, enabling customers to repay
UHWDLO�LQVWDOOPHQW�FRQWUDFWV�LQ�FDVK������DW�DQ\�RI�������SDUWLFLSDWLQJ���(OHYHQ®
stores nationwide.
8VLQJ�3D\1HDU0H��FXVWRPHUV�RI�Westlake’s network of more than 15,000
new and used car dealers will be able to
make account payments in cash at their
local 7-Eleven store, where a unique loan
EDUFRGH�RU�3D\1HDU0H�&DUG�LV�VFDQQHG�DW�WKH�UHJLVWHU��:LWK�3D\1HDU0H��WKH�transactions are completed instantly,
and consumers’ accounts are credited
instantly.
³3D\1HDU0H�RIIHUV�D�UHPDUNDEO\�VLPSOH�way to make our collections process more
HI¿FLHQW�´�:HVWODNH�GLUHFWRU�RI�RSHUDWLRQV�-RKQ�0DVRQ�VDLG��³:H�DQWLFLSDWH�UHGXFHG�operational costs while adding payment
ORFDWLRQV�IRU�RXU�FXVWRPHUV�´“Subprime lenders need to make
cash payments as easy as possible for
WKHPVHOYHV�DQG�WKHLU�FRQVXPHUV�´�3D\1HDU0H�&(2�'DQQ\�6KDGHU�VDLG��“We’ve dramatically changed how
cash payments are made by opening
up thousands of additional payment
locations, accessible any time they are
QHHGHG�´3D\1HDU0H�/HQGLQJ��D�VHFXUH�
hosted web application, provides a
comprehensive turnkey service lenders
can use to accept cash payments
without integration. Lenders can set
XS�3D\1HDU0H�/HQGLQJ�LQ�OHVV�WKDQ����minutes and start collecting immediately,
and can add additional sites almost
LQVWDQWO\��%HFDXVH�3D\1HDU0H�/HQGLQJ�does not require any integration with
H[LVWLQJ�V\VWHPV��LW�FDQ�EH�XVHG�E\�OHQGHUV�of any size.
³:H�DSSUHFLDWH�WKDW�3D\1HDU0H�DOORZV�our customers to make payments at any
WLPH�´�7LGDOZDYH�)LQDQFH�&RUS��SUHVLGHQW�Ted Beresford said. “In fact, we’ve been
pleasantly surprised by how many
customers make their payments at
���S�P�´�
V I S I T W W W. PAY N E A R M E . C O M
Westlake Financial Adds PayNearMe’s Technology
Autobytel Launches Mobile WebsiteAutobytel Inc. has launched a dedicated mobile version of its website.
Studies show shoppers prefer using a browser to a downloadable mobile app, so
Autobytel’s mobile website was developed from the ground up with today’s mobile
consumer in mind. Autobytel mobile includes many of the popular features on the
IXOO�ZHEVLWH�EXLOW�VSHFL¿FDOO\�IRU�WKH�PRELOH�HQYLURQPHQW�7KH�VLWH�IHDWXUHV�D�FXVWRPL]HG�GHDOHU�GLUHFWRU\�WKDW�DOORZV�FRQVXPHUV�WR�¿QG�ORFDO�
dealers as well as new and used vehicle research and automotive industry news, and
FXVWRPL]HG�VKRSSLQJ�WRROV�VXFK�DV�D�XVHG�FDU�¿QGHU��FDU�FDOFXODWRUV�DQG�WKH�DELOLW\�WR�determine used car values and submit purchase requests directly to dealers.
For more information, visit www.autobytel.com.
M O B I L E N E W S
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I R S S T E P P I N G U P FO R M 8 3 0 0 C O M P L I A N C E AU D I T S
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T H E D E A L E R ’ S E D G E SEPTEMBER/OCTOBER 2012
22
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BY CHIP ZYVOLOSKICHIP ZYVOLOSKI IS A SENIOR ATTORNEY FOR INDIRECT LENDING AT WOLTERS KLUWER FINANCIAL SERVICES. FOR MORE INFORMATION, VISIT WWW.WOLTERSKLUWERFS.COM/INDIRECT.
There is no denying that dealers and
lenders have grown accustomed to a
regulatory environment that is constantly
changing, with new laws and regulations.
But today’s regulatory landscape is
different than it was years ago – and not
MXVW�EHFDXVH�WKH�UHTXLUHPHQWV�FRQWLQXDOO\�change.
If you feel like it’s becoming increasingly
FRPSOH[��\RX¶UH�QRW�DORQH��+HUH�DUH�WKH�likely culprits:
Shorter notice: Some states have
started publishing regulatory changes
RQ�UDWKHU�VKRUW�QRWLFH��)RU�H[DPSOH��LQ�1HZ�0H[LFR�WKH�DWWRUQH\�JHQHUDO�UHFHQWO\�gave 30 days’ notice to add a new spot
delivery disclosure to the sales transaction
document or purchase order.
The short notice was made worse
because a proposed regulation had not
been published – at least not recently – so
WKH�¿QDO�UHJXODWLRQ�FDPH�DV�D�VXUSULVH�WR�the industry. While one month might feel
Regulatory Landscape Feeling Tougher? You’re Not Alone
like a long time to add one
disclosure, the required
notice is quite large and
requires substantial
formatting changes to the
documents affected.
The attorney general
eventually delayed the
effective date of the regulation
E\����GD\V��DSSDUHQWO\�DIWHU�VLJQL¿FDQW�LQGXVWU\�IHHGEDFN��
More frequent changes and updates: Across the country, there seem
to be more frequent changes being made.
That has clearly been the case with state
motor vehicle title forms. Previously, those
forms were rarely revised. But over the
past few years, some states have changed
their title forms as many as two or three
times per year.
One potential driver for that might
be that technology now allows states to
redesign and reissue their forms and revise
�LQFUHDVH��WKH�UHODWHG�IHHV�PRUH�HDVLO\��%XW�often the changes come with little or no
notice, which underscores how important it
LV�IRU�GHDOHUV�DQG�OHQGHUV�WR�EH�FRQ¿GHQW�LQ�their ability to monitor the changes that are
constantly taking place.
Volume of information: While it
FDQ�EH�GLI¿FXOW�WR�NHHS�XS�ZLWK�WKH�SDFH�RI�change and various deadlines and effective
dates, it’s also quite a task to consume
the volume of information and content
surrounding new laws and regulations.
)RU�H[DPSOH��WKH�&RQVXPHU�)LQDQFLDO�3URWHFWLRQ�%XUHDX��&)3%��SXEOLVKHG�D�SURSRVHG�UXOH�-XO\���UHJDUGLQJ�LQWHJUDWHG�mortgage disclosures under RESPA and the
7UXWK�LQ�/HQGLQJ�$FW��,W�ZDV�RQH�RI�WKH�¿UVW�VLJQL¿FDQW�SURSRVHG�UXOHV�IURP�WKH�&)3%��DQG�WKH�SODQQLQJ�SURFHVV�LQYROYHG�H[WHQVLYH�research and solicitation of industry and
consumer feedback.
As a result, the proposed rule and
H[SODQDWRU\�PDWHULDOV�WRWDO�PRUH�WKDQ�1,000 pages. The good news is the
SURSRVHG�UXOH�SURYLGHV�VLJQL¿FDQW�GHWDLOV�DQG�H[SODQDWLRQV�RI�WKH�FKDQJHV��7KH�EDG�news is that many pages of material can be
overwhelming (aren’t you glad you’re not in
WKH�PRUWJDJH�OHQGLQJ�EXVLQHVV"��Operating in a highly regulated industry,
one can’t help but wonder if that is an
indication of the volume of change yet to
come and how dealers and lenders will
absorb all of the changes and their nuances.
Disparate technology systems: Though computer technology allows us
to do many things faster than before,
GLVSDUDWH�¿OH�IRUPDWV��¿HOG�QDPLQJ�conventions, calculation engines,
software and hardware, and reliance on
PXOWLSOH�YHQGRUV�FDQ�PDNH�LW�GLI¿FXOW�to quickly change or revise transaction
documentation and its completion tools.
That often means all the component parts
need to be updated in sequence rather than
in parallel – adding more time to make the
required changes.
Today’s environment is characterized
not only by constant change, but by
tougher enforcement as well. There is
more visibility and greater scrutiny of
compliance and risk management in all
RUJDQL]DWLRQV��'HDOHUVKLSV�DQG�¿QDQFLDO�institutions should regularly question
ZKHWKHU�WKH\�IHHO�FRQ¿GHQW�WKDW�QHZ�ODZV�and regulations are being embedded in
their business operations.
The challenges underscore a need for
JUHDWHU�RSHUDWLRQDO�HI¿FLHQF\��'LVSDUDWH�systems and procedures can make even
relatively simple changes more time-
FRQVXPLQJ�DQG�FRPSOH[�As you prepare for additional changes,
consider reviewing your process maps,
technology, vendor coordination and
steps necessary to respond to compliance
changes. Creating greater operational
HI¿FLHQF\�QRZ�ZLOO�PDNH�LW�WKDW�PXFK�HDVLHU�for you to respond to the
LQHYLWDEOH�QH[W�FRPSOLDQFH�crunch-time event.
C O M P L I A N C E OV E R D R I V E
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