july 2011 independent dealer
DESCRIPTION
July 2011 FIADA Independent Dealer MagazineTRANSCRIPT
July 2011 — Independent Dealer — 1www.fiada.com
Information and Insight for Florida Used Car Dealers July 2011 www.FIADA.com
Feeling the pain at the pump? We’ll break down the reasons why, and help you put it into perspective for your customers. Page 18
SINCE 1940
A Publication of the Florida Independent Automobile Dealers Association
PRST STDU.S. POSTAGE
P A I DFULTON, MO
PERMIT NO. 38
www.fiada.com
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NORTHEAST FLORIDAAdesa JacksonvilleAuto Auction11700 New Kings Rd.Jacksonville, 32219
WEST COASTInsurance A/A of Clearwater5152 126th Ave N.Clearwater, 33760
Ramada Inn Tampa11714 Morris Bridge Rd. 1-75 Exit 265Tampa
CENTRAL FLORIDAManheim’s ImperialAuto Auction3300 County Line Rd.Lakeland, 33811
Ocala Driver’s License Office110 SE 25th AvenueOcala, 34471
Manheim Central Florida Auto Auction9800 Bachman Rd.Orlando, 32824
Manheim Remarketing Site Orlando/Ocoee1275 E. Story RoadWinter Garden, 34787
SOUTH FLORIDAManheim Ft. Lauderdale5353 State Road 7Davie, 33314
Adesa Miami/Insurance Auto Auction of Miami12700 NW 42nd AveOpa Locka, 33054
PANHANDLEComfort Inn1013 East 23rd St.Panama City, 32405
FIADA Office1840 Fiddler CourtTallahassee
View Course Descriptions and Register at www.FIADA.com
Jun 30/Jul 1 Orlando/Winter Garden
July 9-10 Tampa
July 11-12 Ocala
July 13-14 Miami/Opa Locka
July 16-17 Orlando
July 18-19 Clearwater
July 20-21 Lakeland
July 23-24 Ft. Lauderdale
July 25-26 Jacksonville
July 27-28 Tallahassee
Aug. 4-5 Orlando/Winter Garden
Aug. 6-7 Tampa
Aug. 8-9 Ocala
Aug. 10-11 Miami/Opa Locka
Aug. 13-14 Orlando
Aug. 15-16 Clearwater
Aug. 17-18 Lakeland
Aug. 20-21 Ft. Lauderdale
Aug. 22-23 Jacksonville
Aug. 24-25 Tallahassee
JUNE 2010 JULY 2010JULY 2011 AUGUST 2011 SEPTEMBER 2011
Sept. 1-2 Orlando/Winter Garden
Sept. 3-4 Tampa
Sept. 5-6 Ocala
Sept. 7-8 Miami/Opa Locka
Sept. 10-11 Orlando
Sept. 12-13 Clearwater
Sept. 14-15 Lakeland
Sept. 17-18 Ft. Lauderdale
Sept. 19-20 Jacksonville
Sept. 21-22 Tallahassee
July 2011 — Independent Dealer — 3www.fiada.com
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 Brandi Noegel President
Jim Kagiliery Chairman of the Board
Dino Mercurio Secretary
John Cousins Treasurer
Jim Kagiliery Regional Vice President
Frank Fuzy Regional Vice President
George Hickey Regional Vice President
Steve Marbais, CMD Regional Vice President
Chris Leedom Regional Vice President
FIADA STAFF Steve Jordan CEO
Lisette Mariner Executive Director
Terry Myers Educational Instructor
Sarah Langley Administrative Director
Alex Romans Education Director
Christy Taylor Editorial/Advertising
POSTMASTER:Send address changes to:FIADA • 1840 Fiddler Court
Tallahassee, FL 32308(850) 385-2712 • Toll Free: (800) 237-0448
Fax: (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 in Tallahassee and distributed to Florida new, used, wholesale and lease/retail car dealers. Advertising rates are available upon request.
The statements and opinions expressed herein 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.
ContentsJuly 2011
For members of the Florida Independent Automobile Dealers Association
C O L U M N S & F E A T U R E S
4 President’s Message Brandi Noegel
6 Executive Director’s Message Lisette Mariner
8 Texas BHPH Dealer Wins NIADA’s Top Honor Scott Allen was named the National Quality Dealer at NIADA’s Annual
Convention in Las Vegas.
10 Legal Corner Thomas B. Hudson, Esq
12 You Never Stop Learning Chuck Bonanno shares why successful dealers should always be looking for
ways to continue their education.
16 Tow Woes A year after FIADA’s ground-breaking curbstoning legislation and there seems
to be some confusion on the best way to enforce it.
18 Are Gas Prices Too High? A primer in the way crude oil prices are set and how it can affect what you pay
to fill your tank.
23 FIADA Annual Convention Your first preview, and chance to register, for the 2011 FIADA Annual
Convention and Trade Show.
28 Legislative Update The Honorable John Grant and Jennifer Lux, FIADA Legislative Advocates
30 Industry News
U P C O M I N G E V E N T SOctober 13-15, 2011FIADA Annual Convention & Trade ShowGaylord Palms ResortOrlando, FL
Scan this code with your smart phone or mobile device to register now for the FIADA Annual Convention.
www.fiada.com4 — Independent Dealer — July 2011
I just attended the NIADA Convention in Las Vegas, and as always, I came back richer with knowledge from the educational seminars.
Years ago, I remember buying an IBM computer and software that was slow, operated on a 5-1/4” floppy disk and had a green monitor. My employees were not sure what to think of it then, but we ran our first late list they fell in love with it. Over the years, of course, the software and the equipment continued to improve and more vendors with more choices entered the market. Technology started moving at a rapid pace and there was no stopping it.
As computers and software developed, so did the FIADA and NIADA conventions. Soon, the conventions were about building the best websites and learning what you need to have for an online presence. Next came the sessions on eBay, Auto Trader, Cars.com and help listing and selling our cars online. When auctions joined the mix, we learned about buying vehicles online. I have to admit that it can be hard to keep up. As technology changes sometimes I feel it is getting a little ahead of me now.
This past NIADA convention there was quite a focus on social media. Over 50 percent of the world’s population is under 30 and 96 percent is on the social net. What is social media? It is Twitter, Facebook and who knows what else will be included next. You will soon, if not already, need an iPhone and the iPad to keep up. Some days it seems you almost need to hire a kid to learn how to set up and operate these new devices. These modern advances have made it possible to just sit in your office, buy a vehicle, check the history, sell it, transport it, and do the title work.
Come to Convention;Leave with KnowledgeBY BRANDI NOEGEL
F R O M T H E P R E S I D E N T
Who would have thought all that would be possible back a few years ago? My, how things have changed. You need to go to the convention to keep up with what is going on in this changing world. It is so important! Regulations and laws change daily.
A big business item that was brought up during NIADA Convention was a meeting with the state presidents and state executive directors concerning issues with CARFAX. Yes, a lot of us use them and they do have a lot of great information in their program, but they have made some questionable decisions lately, such as pricing vehicles through their price calculator. Scott Fredericks, VP Marketing for CARFAX and Lance Vickery, Director of Client Services tried to explain why they do this, but it did not go well and many dealers claimed they will not use it until the price calculator stops. CARFAX mentioned they get there pricing from CarBiz which brought many questions since that company has been out of business for the past few years. The CARFAX reps said the pricing will not stop and they plan to continue it. Even though, we are their customers, we are not happy about it. Even with the promise to try to minimize errors, most everyone at the meeting did not leave happy!
The FIADA Convention is coming to Orlando in September and I want to encourage all dealers to come and learn about what is going on. We are all just dealers trying to make a living in a very bad economy. Educating yourself is the only way you can help yourself right now in this ever-changing world. Working together will only make us better and stronger.
Sincerely,Brandi Noegel, FIADA President
6 — Independent Dealer — July 2011 www.fiada.com
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
BY L ISE T TE MARINER, F IADA EXECUTIVE DIREC TOR
As I officially settle into the driver’s seat for FIADA, I most recently attended the NIADA convention in Las Vegas. I had the wonderful experience of witnessing the installation of our own, Frank Fuzy, owner of Century Motors of South Florida to the NIADA board. I enjoyed the sessions, visiting the exhibition
hall and networking with state executives, as well as the vendors and independent dealers. There is so much on the horizon. Did you know that included in your FIADA membership is a membership with the National Independent Au-tomobile Dealers Association? What an amazing deal! Not only do you have FIADA fighting for you, you have the benefit of national protecting you too. Together we are working for you. Your FIADA committees and board are hard at work. We met in Palm Beach, FL where the committees and board discussed the future of FIADA. We are looking at membership, legislation, and putting the final touches on convention. What an amazing group. I would encourage you to be an active participant and get involved. If you’re interested in being part of a committee, please contact me at [email protected]. I am excited to meet you. Save the date and join me at the FIADA convention October 13-15 at the Gaylord Palms Resort in Kissimmee. Look for more details in next month’s magazine.
Working Together
Florida delegates at the NIADA Convention.
Frank F uzy (center) sits
on the NIADABoard.
NIADA CEO Mike Linn addresses convention attendees.
The exhibit hall was full of vendors with helpful products and services.
2011 NIADA ANNUAL CONVENTION
6 — Independent Dealer — July 2011 www.fiada.com
July 2011 — Independent Dealer — 7www.fiada.comPAID ADVERTISINGPA
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8 — Independent Dealer — July 2011 www.fiada.com
It was Sept. 17, 1987, when then stockbroker Scott Allen decided that another occupation might better suit his talents as an entrepreneur. Most will remember
that date as Black Monday when the stock market took a huge plunge and sparked a recession. It was a bad day for the financial marketplace, but a good day for Allen and, as it turns out auto dealers in his hometown of Haltom, Texas, near Fort Worth, and eventually dealers throughout the state. Last month at the NIADA National Convention in Las Vegas, Allen, owner of Au-toland a buy here-pay here operation, was named the 2011 National Quality Dealer of the Year. He opened the business in 1991 as a joint venture with his father, who had recently retired. They rented a small location, put out a shingle and began buying vehicles to sell on the small lot. As the business grew, they purchased their own loca-tion. They started the business with about $500,000 of our own capital and did that be-fore the company became a subchapter S corporation and before they could have a related finance company. Today, Autoland employs six people including Allen, sells about 35 units a month, has 300 active accounts and has a $1.8 million principal-only portfolio. “We have stayed with the older model unit, 7-12 years old with an ACV of about $3,300,” Allen said. “Our recon costs average about $500 a unit. I’m not going to tell you where we get our inventory, but they are out there. You just have to go to more places, more often to find what you need.” After a couple of years of having their own dealership, the Allens wanted to expand their operation by demolish-ing their existing facility and building a new facility on adjacent property. The problem was the city council and
the zoning commission had past local ordinances, which basically made it impossible for new dealerships to move into the community and for existing dealerships to expand or relocate. These new zoning laws put every dealer in his city in jeopardy of losing their conforming status and their ability
to continue doing business as an auto facility. Allen formed the Haltom Urban Business Association and was elected its president. The association began hav-ing weekly meetings to discuss and formulate plans to fight the proposed changes and suggest possible solutions. Membership in the business association grew quickly and within six weeks had more than 100 business owners as members. Allen wrote letters and made appearances that initi-ated workshops and City Council meetings. Within nine months, the association had convinced the city council to establish a stand-alone zoning for Auto Dealerships with a new set of standards that pleased dealers, the City Council and the residents of the city. Shortly thereafter, he was asked to serve on the Haltom’s Planning and Zoning Commission as a commissioner. He served six years, the last two as Chairman of the Commission. He has been a member of the Texas IADA for 17
years, where he is president-elect. He also has served on the TIADA executive committee since 2007. Allen is presi-dent of the Fort Worth IADA, a post he’s held for the last five years. This month Allen will become the Texas IADA president for 2011-2012. Allen said he’s been very fortunate to be a dealer and feels it is important to give back to both the industry and his community. “We’ve been fortunate,” he said. “We’ve been successful at this business and profitable because honesty and integrity have been our core values.”
Peter A. Salinas is a career journalist who has been covering the used-vehicle industry for more than 11 years. He is the managing editor of Dealer Business Journal.
Texas BHPH Dealer Wins NIADA’s Top HonorB Y P E T E R A . S A L I N A S
NIADA’s Quality Dealer of the Year, Scott Allen. Allen owns Autoland, a buy here-pay here dealership in Haltom, Texas.
July 2011 — Independent Dealer — 9www.fiada.com
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10 — Independent Dealer — July 2011 www.fiada.com
The Federal Reserve Board and the Federal Trade Commission (the “Agencies”) have issued final rules to implement the credit score
disclosure requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).
Risk-Based Pricing RegulationsThe Agencies jointly released amendments to the Risk-Based Pricing Rules to require disclosure of credit scores and related information in risk-based pricing notices if the creditor uses the consumer’s credit score to set the material terms of credit. The final rule implements the provision added to Section 615(h) of the Fair Credit Reporting Act (“FCRA”) made by Section 1100F of the Dodd-Frank Act.
The final rule requires creditors to disclose certain information to consumers when creditors use a credit score to set or adjust the terms of credit, including: (1) the credit score used by the person in making the credit decision; (2) the range of possible credit scores under the model used to generate the credit score; (3) all of the key factors that adversely affected the credit score, which must not exceed four key factors. However, if one of the key factors is the number of inquiries made, the number of key factors must not exceed five; (4) the date on which the credit score was created; and (5) the name of the consumer reporting agency or other person that provided the score. The final rule also requires a statement that a credit score is a number that takes into account information in a consumer report, that the consumer’s credit score was used to set the terms of credit offered, and that a credit score can change over time to reflect changes in the consumer’s credit history. The final rule includes model forms.
The credit score disclosure requirement is mandatory as of July 21, 2011.
Adverse Action NoticesSection 701 of the Equal Credit Opportunity Act requires a creditor to notify a credit applicant when it takes adverse action. Section 615(a) of the FCRA requires a person to provide a notice when the person takes an adverse action against a consumer based in whole or in part on information in a consumer report. The Federal Reserve Board also released the final rule for the revised model notices to reflect the new content requirement in Section 615(a) of the FCRA made by Section 1100F of the Dodd-Frank Act.
The revised content of the model forms can be found at www.FIADA.com. The disclosures must appear primarily in narrative format, after the information related to the reasons for why adverse action was taken and the statement that the creditor obtained information from a consumer reporting agency.
Use of the revised model forms is mandatory as of July 21, 2011.
Thomas B. Hudson, Esq. ([email protected]) is the Publisher of Spot Delivery®, a monthly legal newsletter for auto dealers, and the Editor in Chief of CARLAW®, a monthly report of legal developments in all states for the auto finance and leasing industry. He is also a partner in the Maryland office of Hudson Cook, LLP. Spot Delivery and CARLAW are produced by CounselorLibrary.com LLC, 7250 Parkway Drive, 5th Floor, Hanover, MD 21076-1343. For information, call 410-865-5411 or visit www.counselorlibrary.com.
Amended Risk-Based Pricing Regulations and Reg B NoticesB Y T H O MA S B . H U D S O N , E S Q
L E G A L C O R N E R
July 2011 — Independent Dealer — 11www.fiada.com
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12 — Independent Dealer — July 2011 www.fiada.com12 — Independent Dealer — July 2011 www.fiada.com
If there is one constant in our universe, it is change. We need to recognize change and search
for the opportunities that lie within change. We can choose to fight change, but it is inevitable and actually necessary. We must adapt to changes every day and provide an environment where change is not feared but accepted and embraced in our dealership. I am certain there were horse buggy lots around the turn of the last century whose dealers said “the automobile will never replace the horse and buggy.” They went bankrupt. Other horse buggy dealers saw the changes coming and took action to prepare for the new era and changed from selling buggies to selling automobiles. Still other individuals foresaw the market changes and entered the automobile market for the first time.
What was the difference between the dealers who did not see change coming or refused to act upon change and those who saw it coming, made changes and survived? Resisting change and questioning the reality of the situation played a role in their demise, but what they really lacked was knowledge. They failed to see, understand, plan and act based on events in an ever-changing world. They were not stupid, but they were ignorant. They failed to continue their education.
So that begs the question; are you continuing your education? Education comes in many forms and from
many places. Don’t believe that you must experience everything to learn everything. You don’t need to burn your fingers on the stove to understand that you shouldn’t touch hot things. Learn from books, tapes, videos, CD’s, DVD’s, trade publications, professional publications, family, friends, mentors, partners, seminars, workshops, conferences, conventions, trade associations, professional associations, accountants, attorneys, consultants and other dealers through a Dealer Twenty Group program.
The written word is always a good place to start. Trade publications such as the one you are now reading are excellent sources of information and knowledge and also provide products and services to assist you as a dealer.
Industry events and associations are another great source for continuing your education. Events such as the upcoming FIADA Annual Convention or the Leedom Group Buy Here-Pay Here National Convention can be invaluable sources for education and training.
I work with over 180 dealers and finance companies across North America as a
moderator of Buy Here-Pay Here and Automotive Finance Twenty Groups. I have yet to moderate one where I didn’t learn something new from a meeting participant. I laugh (really cry) when I think back to 1996 when, my now partner, Chris Leedom called me to join a Twenty Group and I said, “Thanks but we don’t need that program.” We thought we knew everything about Buy Here-Pay Here. I can assure you, we did not. The lesson is that we are never too experienced, too large, or too smart to continue our education. If you think you know it all, you have made a serious miscalculation.
Chuck Bonanno is a partner of the firm, Leedom and Associates, LLC. He is an executive Conference Moderator of Buy Here-Pay Here and Automotive Finance 20 Groups. He is a nationally recognized speaker, author, industry trainer and consultant.
You Never Stop
B Y C H U C K B O N A N N O
LEARNINGIf you think you know everything about running your business,maybe it is time to think again.
July 2011 — Independent Dealer — 13www.fiada.comwww.fiada.com
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The FIADA Board of Directors recognizes that in this recovering economy, renewing your continuing education credits is just one more expense you are required to spend. To make it easier, for a limited time FIADA Members can now get their continuing education credits online for free.
(for a limited time)Perfect For Groups:Now is the perfect time to let your whole office brush up on their skills. As a member, you can allow an unlimited amount of students to participate in the online CE course.
Go Online to www.FIADA.com, or call FIADA at (888) 587-0004.
Online CE is nowFREE to members
July 2011 — Independent Dealer — 15www.fiada.com February 2011 — Independent Dealer — 15www.fiada.comPAID
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www.fiada.com16 — Independent Dealer — July 2011
It has been a year since FIADA’s curbstoning legislation was unanimously passed by both the
Florida House and Senate (HB 631/SB 1182), signed by the Governor and recorded into law. The bill, which gave new teeth to curbstoning legislation by making it easier to have vehicles found in violation to be towed, was the knock-out punch FIADA members had been waiting for in the fight against illegally parked cars for sale by unlicensed dealers.
The new law eliminated previous language that required a 24-hour notice be given to the vehicle’s owner and provided that instead it could now be towed immediately, at the owner’s expense. It also created a new $100 fine for anyone found in violation of the law. Adding even more muscle was a provision that expanded the dragnet of enforcement to not just the Division of Motor Vehicles, but any law enforcement officer or local government code enforcement officer.
So, with the ability to tow the car immediately, more agents authorized
to make it happen and heavier penalties and fees placed on the individuals at fault there has to have been an increase on the number of vehicles removed from a place where they were unlawfully parked for sale, right? Maybe not.
According to data supplied by the DMV, a total of 40 cars were towed in fiscal year 2010-2011. Not quite the “ka-pow” that was expected; in fact some may say that number is down-right disappointing.
What happened? Are there not as many cars out there as we thought? No, a quick trip around the block confirms there are plenty of curbstoned cars still on the streets in plain view. Was it a poorly-written law? Not a chance, HB 631/SB 1182 is very clear about what kind of vehicle can be towed, the procedure, the penalties and those who are authorized to enforce it. What is the problem then?
For starters, limited budgets and less manpower have caused the DMV to
put the issue of curbstoning on the back burner. While the Department is certainly concerned with consumer protection and unlicensed dealer activity, they simply are not able to make curbstoning a priority focus. After losing key positions after the budget-cut war, DMV is not able to place officers on the road in search of violations like they used to. Instead, curbstoning enforcement has had to become an incidental part of their current workload.
Maybe the confusion lies in how dealers and DMV interpret the new law. From a dealer’s perspective, DMV has historically been the go-to agency on all things related to dealer licensing and regulation. It stands to reason that most dealers would assume the new curbstoning law was written for the Department in an attempt to make it easier to enforce.
The Department, however, understands that curbstoning is a serious issue and is illegal, but at the same time they have had to confine their responsibilities and priorities
Are Frustrations Over Curbstoning Enforcement Over? Not Quite.
FIADA’s Curbstoning Legislation passed to crack down on curbstoners, but enforcement issues still plague the industry. BY CHRIST Y TAYLOR
16 — Independent Dealer — July 2011 www.fiada.com
July 2011 — Independent Dealer — 17www.fiada.com
GOT A CURBSTONING PROBLEM IN YOUR AREA? TAKE IT TO YOUR DMV REGIONAL OFFICE:
The DMV’s Bureau of Field Operations are open to accept complaints from licensed dealers about curbstoned vehicles. Call or email your regional office if you want to report a problem.
Region 1, Margate(954) 969-4216 • [email protected]
Region 2, Ocala(352) 732-1267 • [email protected]
Region 3, Jacksonville(904) 924-1524 • [email protected]
Region 4, Deland(386) 736-5108 • [email protected]
Region 5, Orlando(407) 445-7400 • [email protected]
Region 6, Tampa(813) 612-7110 • [email protected]
Region 7, Tallahassee
(Dixie, Franklin, Gadsden, Hamilton, Jefferson, Lafayette, Leon, Liberty, Madison, Suwanee, Taylor and Wakulla)(850) 617-2999 • [email protected]
(Bay, Calhoun, Gulf, Jackson and Washington)850 872-4158 • [email protected]
(Escambia, Holmes, Okaloosa, Santa Rosa and Walton) 850 475-5415 • [email protected]
Region 8, Palmetto(941) 723-4551 • [email protected]
Region 9, West Palm Beach(561) 640-6820 • [email protected]
Region 10, Miami(305) 265-3003 • [email protected]
into whatever post-financial meltdown budget they have been given. The public outcry for less government, less spending leaves agencies such as the Division of Motor Vehicles with fewer resources and less money. The main idea behind HB 631/SB 1182, in their minds, is that law enforcement and code enforcement agents can now help with the enforcement, and utilizing their help is the most efficient way to take care of the problem.
Shortly after the bill passed, the Department sent a letter to all law
enforcement agencies and code enforcement offices
explaining the new law and how it could be a potential revenue-generator, through collection of the $100 fine from each violation. There have also been announcements
placed in law enforcement newsletters, including the
Sheriff ’s Star Magazine distributed to all members of the Florida Sheriff ’s Association. The Department has also recently taken on the campaign of building relationships on a local level with code enforcement officers around the state. The hope is that each of these groups will see the need and discover the benefit of enforcement and will assemble their own curbstoning army that will seek out violations and have vehicles towed.
As these extra eyes, and tow hooks, join the hunt there is still a need for dealers to be proactive in the situation. Not only does curbstoning give an unfair competitive advantage to the person illegally parking the car for sale, but it also has the potential to hurt the reputation of dealers everywhere. The numbers of licensed dealers who have been served with curbstoning violations are very low, as are private individuals who park their cars not realizing they were breaking the law. Reading between the lines, it can be assumed that unlicensed dealers are
the main curbstoning culprits. That being the case, the danger of the situation is all the more serious.
“We of course are concerned about compliance with the law and want to make sure that dealers are selling from a licensed location. A non-dealer who is curbstoning is participating in unlicensed activity and that greatly concerns us,” Ed Broyles, chief, Motor Vehicle Field Operations said. “In both cases there is risk for consumer harm.”
While the DMV recognizes curbstoning to be a problem, they still are not willing or able to commit the resources to enforcing it that would make everyone happy. That is where dealers who are particularly affected by the problem can become part of the solution. First, when there is a known curbstoning problem, alert one of the DMV Regional Offices. Once the complaint is received, the DMV’s Bureau of Field Operations will assign a compliance officer to investigate the situation. If the car is found in violation, the appropriate action will immediately be taken.
Also, seeing as dealers play a large role within their local communities, developing a relationship with both local law enforcement and code enforcement would be another way to bring the problem of curbstoning under control. Once aware of the issue, how it affects the community and the added incentive of extra revenue, chances are they will be interested in joining forces.
Teamwork will be the final blow that takes out the curbstoning threat. As dealers, DMV and local law enforcement work together HB 631/SB 1182 will have the effect it was designed to have. Woe to the curbstoner who has made a habit of breaking the law: if you continue to park your cars illegally, operate without a license and bring dishonor to the industry, you will be towed.
July 2011 — Independent Dealer — 17www.fiada.com
18 — Independent Dealer — July 2011 www.fiada.com
Oil--few commodities are as powerful, or as temperamental.
Oil is powerful because it has an effect on nearly every other product or service available on the global market. Oil is needed to run machines in factories; as a material for manufacturing anything from fishing line to golf balls; a fuel source for trucks, trains, ships and planes that carry those products to the shelves and over the oceans and ultimately to get people to the store to buy it. Oil is the blood that makes our modern civilization work, and without it things would literally come to a screeching halt.
Because oil and petroleum products are so crucial to our society, and our businesses, it makes sense to analyze and anticipate how the process works--not its scientific properties but the economic factors that surround it. What drives crude oil prices? How does it affect the price at the pump? Does that make it harder to sell cars? Knowing the answers to these questions may help you overcome your customers’ fears about fuel efficiency and gas prices or at the very least help you anticipate what will appeal to them.
Crude Oil 101Let’s start with the basics; what drives crude oil prices? As with most things in a free market, the price of oil fluctuates as a result of supply and demand, though for crude oil it is a little more complicated. According to the U.S.
Understanding the nature of how prices are set for crude oil and petroleum products might help put things into perspective the next time you go to the pump.
BY CHRIST Y TAYLOR
18 — Independent Dealer — July 2011 www.fiada.com
July 2011 — Independent Dealer — 19www.fiada.com
Energy Information Administration, there are seven factors that affect crude oil prices: supply from non-OPEC producers, supply from OPEC producers, balance of inventory, spot prices, activity from financial markets, demand from countries in the Organization of Economic Cooperation and Development (OECD) and demand from countries that are not members of OECD. That is a lot of factors and acronyms, so let’s break them down a little better.
When talking about supply, there are two major groups to become familiar with. An organization called OPEC (Organization of the Petroleum Exporting Countries), is an intergovernmental organization of 12 oil producing and exporting countries that seeks to actively manage oil production in its member countries by setting production targets. (The OPEC alliance of countries includes Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela). OPEC members produce about 40 percent of the world’s crude oil, and represent about 60 percent of the total petroleum traded internationally, making OPEC actions a large influence on international oil prices. When the amount of oil OPEC keeps in its reserves fluctuates, whether intentionally or unintentionally, the market moves with it. Low amounts of spare reserves will usually mean higher prices.
The oil producers from countries not affiliated with OPEC represent 60 percent of the world’s oil production. The key players in this group include North America, regions of the former Soviet Union and the North Sea. By and large, these producers are international or investor-owned oil companies, whose primary motivation is shareholder value. Most non-OPEC producers operate at full capacity and have little reserve. If their production is reduced, such as
by a hurricane in the Gulf of Mexico that halts drilling for several days, the world’s reliance on OPEC producers is higher, and prices will increase.Demand for oil splits the world again into two groups: Members of what is known as the OECD (Organisation for Economic Co-operation and Development) and those who are not. The United States, most of Europe, Japan and other advanced countries make up the 38-member OECD which tries to create a global network of governments fostering prosperity and fighting poverty through economic growth and financial stability. Non-OECD members are developing countries such as China, India and Saudi Arabia. The difference between the two groups, as it relates to oil consumption, has a lot to do with their current and future needs. The OECD member countries consume more oil, 53 percent of the world’s consumption last year, but have less consumption growth. If anything, because the main consumption in these countries is in personal and commercial transportation costs, demand for oil can decrease as gas prices increase and people look for more fuel-efficient or alternative fuel. On the contrast, developing countries have economies that are dependent on manufacturing which means that as their economic activity rises so does their demand for oil. In the decade between 2000 and 2010, while oil consumption declined in the OECD countries, it increased more than 40 percent in non-OECD countries.
Oil pricing is more about what will happen next than what is happening now. Futures contracts play a large role in setting the current cost per barrel. There are a variety of groups who are interested in oil futures. Those who deal directly in the physical trading of oil, such as oil producers and commercial airlines, have a significant stake in the changes in price of oil and petroleum-based fuels. An airline, for example, may commit to buy a set
amount of oil at what they consider to be a safe price in order to avoid paying a higher price down the road. An oil producer may want to secure a sale of future oil in order to lock in a desired price before producing it. In recent years there has been interest from banks, money-managers and other investors to add oil and related commodities in an attempt to diversify their portfolios. This group, unlike the first, is not at all concerned with securing the physical trade of oil but seeks to profit from its change in price. For this reason, there is concern that these non-commercial commodity traders and investors can amplify price movements in either direction.
The futures that these groups analyze include the amount of inventory currently held by the world’s oil producers, their projected production and anticipated levels of demand. Whenever there is a kink in this system, such as the Deepwater Horizon spill in April 2010 that poured crude straight into the Gulf of Mexico and halted offshore drilling or a geopolitical event like the recent civil war in Libya where speculators feared unrest spreading to nearby countries who are also oil producers, the uncertainty over future supply results in a higher price.
A Thirst for OilSince nearly the dawn of time, man has found immeasurable uses for oil and petroleum products. Asphalt can be traced back more than 4,000 years ago when it was used in Babylon to construct walls and towers. Through the years more discoveries were made from kerosene to the internal combustion engine and with each invention society grew more dependent on oil and the things it could provide. Energy crisis are nothing new, either. From the 1970s forward, each decade has seen its share of shortage in oil production and supply that put ripples into the economic pool. None seem
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five percent anticipate their next car will have worse fuel economy, likely because of their changing driving needs such as a growing family driving a minivan or a small business owner who needs a pickup truck.
Of those surveyed, most expect their next car to deliver an average of 29 miles per gallon, while some groups such as older drivers, women and lower-income households will seek even greater fuel efficiency. Another point to consider, more than half of the survey respondents said they were willing to pay extra for a more efficient vehicle but will not compromise safety. Compared to their current cars, shoppers seem to be moving away from new and used sedans, even though sedans generally provide an ideal balance of fuel economy and safety. The number of those surveyed who expect to buy a new sedan is five percentage points lower than the number who currently own a sedan, and the number who expect to buy used is eight points lower. According to Consumer Reports, shoppers are gravitating toward new small and midsized SUVs which may point to the desire to have both fuel efficiency and safety in a larger vehicle.
Anticipating the needs of customers has always been a strength of successful independent dealers. Fuel efficiency and MPG are buzzwords right now that do not seem to be going away anytime soon. A hurting economy has had an affect on car sales, but also high on the list is concern for gas prices. Customers may not be calling as often as you hope, but when they do, be prepared to give them the fuel-efficient vehicle they are looking for.
quite as impacting, however, as the most recent events that have occurred within the past three years.
In July 2008 crude oil prices reached a record high of over $145 a barrel, according to the U.S. Energy Information Administration. There were a lot of factors that led to the spike, and many of them had to do with a global dependency on oil such as reports that the United States Department of Energy showed a decline in petroleum reserves, a worldwide discussion of peak oil, increasing tensions in the Middle East and the rising trend of oil speculation and futures trading. Consider also the significant political events and natural disasters that occurred in the first eight years of the new millennium such as the North Korean missile tests, 2006 worries over Iranian nuclear plants and the devastation that lay in the aftermath of Hurricane Katrina. This was also the time American car shoppers seemed to have an unquenchable thirst for large, gas-guzzling heavy-duty trucks and SUVs. The Ford F-Series and the Chevy Silverado dominated auto sales in the first decade of 2000, and neither could crawl out of the teens when it came to miles per gallon.
During the summer of 2008, Americans found themselves paying more than four dollars a gallon at the pump, according to the price-comparing and record-keeping website GasBuddy.com. Economists like University of California, San Diego Economics Professor James D. Hamilton and leading Canadian economist Jeff Rubin, a former Chief Economist of the investment bank CIBC World Markets, believe that the staggering, rapid change in the price of oil had a larger influence on the “Great Recession” then most people think. Fuel costs ate into the discretionary spending accounts of many Americans, and households from coast to coast saw an impact on their
monthly budgets. You cannot live without food, clothing or shelter but, you also cannot live without gasoline to get you to work and back so you can afford to pay for those life essentials. Americans, who struggled between filling up their tanks and paying their mortgages, consequently adjusted their driving habits and vehicle purchasing decisions. Among other factors, the tightening of the belt seemed to help put a dent in gas prices. As the world’s largest oil consumer, a change in the United State’s demand for oil helped to create an imbalance in the supply inventory, sending prices falling almost as quickly as they had climbed, as 2008 ended with gas prices back down to $1.64.
Focus on Fuel EfficiencyFears of high-oil sticker shock, like that in 2008, brought about changes in philosophy for both consumers and manufacturers. Fuel efficiency has become a growing concern for car shoppers and carmakers have answered with new models like the Chevy Cruze and the reintroduced Ford Fiesta.
Recent sales data supports that notion that consumers are moving away from large trucks and SUVs and into more fuel-efficient choices. According to an article from automotive industry analysis magazine Edmunds Auto Observer, five years ago, 65 percent of Ford’s sales volume was in trucks and truck-based products. Today, 60 percent of its sales are in cars and car-based crossover utility vehicles. A recent Consumer Reports survey found that 62 percent of respondents planning to purchase a car will choose a model with better gas mileage, 32 percent expect to stay the same and
Car shoppers expect their next car to deliver an average of 29 miles per gallon, while some groups will seek even greater fuel efficiency.
" Consumer Reports National Research Center survey[ ]
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www.fiada.com24 — Independent Dealer — July 2011
and then $195 for eachadditional employee.
Includes dealer, spouseand kiddos.
Dealer Express Registration
$99For all seminars and
training events. No meals.
Per night, including resort fee.
Experience Old Florida at the Gaylord Palms Resort & Convention Center in Orlando, the site of FIADA’s 2011 Annual Convention and Trade Show. This year’s convention will include top-level education sessions, an energetic exhibit hall and plenty of opportunities for family fun and entertainment. Make plans now to attend the industry’s top event. Log on to www.FIADA.com/convention.cfm for more details.
FIADA’s special room rate at the Gaylord Palms Resort is $144 a night, including resort fees. Hotel amenities in-clude: wired and wireless internet connection, fitness center, complimentary in-room beverages, daily newspaper and local shuttle service. Space is limited. Reserve your room by calling (407) 586-2000. Ask for the FIADA group rate.
The FIADA Golf Tournament is back! Hosted at the Celebration Golf Club, the FIADA Golf Tournament will be fun for all skill levels. The best ball scramble format with shotgun start will include prizes for the winning team, closest to the pin, longest drive and a chance to win a hole-in-one grand prize!
Transportation is provided to the golf course from the hotel. Lunch begins at 12:00 noon.
Net Proceeds benefit the FIADA PAC Fund. Contributions to the FIADA PAC are voluntary and not tax deductible.
CHOOSE YOUR REGISTRATION PACKAGE: HOTEL INFO:
and then $195 for each
CorporateRegistration
$249
FamilyRegistration
$349
FIADA GroupRoom Rate
$144
TOURNAMENT REGISTRATION:
July 2011 — Independent Dealer — 25www.fiada.com
1. DEALER EXPRESS REGISTRATION Badge Name: ___________________________________________________ [ ] $99 Badge Name: ____________________________________________________ [ ] $99 For all scheduled seminars and training events, but does not include meals.
2. CORPORATE REGISTRATION Badge Name: ___________________________________________________ [ ] $249 Additional Attendee: ______________________________________________ [ ] $195 Additional Attendee: ______________________________________________ [ ] $195 All corporate registration attendees are allowed access to all events and meal functions.
3. FAMILY REGISTRATION Badge Name: ___________________________________________________ [ ] $349 Spouse Name: ___________________________________________________ [ ] Included Child Name: _____________________________________________________ [ ] Included Child Name: _____________________________________________________ [ ] Included Family Package attendees are allowed access to all events and meal functions. CE Credits and Certificates of Completion available for active FIADA members, corporate attendees and family attendees upon request.
4. GOLF TOURNAMENT Individual Player: ________________________________________________ [ ] $75 Foursome: ______________________________________________________ [ ] $275 Individual players will be paired up with other players. Please list names of foursome players in space provided. Net Proceeds benefit the FIADA PAC Fund. Contributions to the FIADA PAC are voluntary and not tax deductible.
TOTAL REGISTRATION FEES: $__________
PAYMENT METHOD[ ] I have enclosed a check made payable to FIADA [ ] I will be using a credit card
Credit Card Type: [ ] Visa [ ] Master Card [ ] American Express [ ] Discover
Name (as it appears on card): ____________________________________ Company: ______________________________________
Credit Card Billing Address: _____________________________________________________________________________________
Credit Card Number: ________________________________________________ Exp Date: ________________________________
Authorized Signature: X __________________________________________________ CC Security Code: ____________________CANCELLATION POLICY: Refunds may be honored with a 72-hour notice. Please submit cancellations in writing.
HOTEL ACCOMMODATIONSPlease contact Gaylord Palms Resort directly at (407) 586-2000 and mention you are part of the FIADA Annual Convention to receive the group rate. Reser-vations must be made by Sept. 12, 2011 to receive the FIADA group discount of $144.00 per night, plus tax. This reduced group rate will not be guaranteed after this date. Reservations will be accepted upon a space available basis.
REGISTER ONLINE NOW AT WWW.FIADA.COM OR CALL (800) 237-0448Mail/Fax registration to: FIADA • 1840 Fiddler Court • Tallahassee, FL 32308 • FAX (850) 385-3251
COMPANY INFORMATIONCompany: __________________________________________________________________________________________ Mailing Address: ____________________________________________________________________________________ City/State/Zip: ______________________________________________________________________________________ Phone: __________________________________________ Fax: ____________________________________________
E-mail: __________________________________________ Website: ________________________________________
REGISTRATION INFORMATION (Please Note: fees in each category will increase by $100 after September 12, 2011.)
Special Membership Tickets Now On Sale!
Get your ticket for a chance at $10,000. Tickets are $50 each. Only 1,000 tickets will be sold.
Call FIADA at (800) 237-0448 or go online to www.FIADA.com.
Proceeds from ticket sales will benefit the Florida Association of Food Banks.
Four $500 drawingsOne $1,000 drawingOne $2,000 drawingOne $10,000 drawing
Drawing will be held on Saturday, Oct. 15, 2011 at the 2011 FIADA Annual Convention. You do not have to be present to win.
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Reflecting on the Past:Looking to the FutureBY HONORABLE JOHN GRANT and JENNIFER LUX,F IADA LEGISLATIVE ADVOCATES
It seems like we were just bringing in the New Year and now the 2011 legislative session is history. For the FIADA, it was a good one.
Unlike last year when we were on the offensive to pass the curbstoning legislation, this year we were on the defensive speaking out against legislation that would be bad for our dealers. Bills ranged from those that would take away dealer’s lien rights for vehicles in automobile repair shops to the towing bill, the tire bill and several others. With the help of our lobbyists, FIADA staff and calls and visits by our member dealers, we were able to defeat each and every bill on our “kill” list. It was a job well done and in addition to defeating bad legislation for our dealers, we further “branded” FIADA and its strength with many legislators. After two years of a stronger than ever legislative presence, legislators want to know how FIADA views bills before they vote. Our only offensive, and still remaining issue, is to reduce the draconian fee increases slipped in at the end of the 2009 session. We almost got it done this time and certainly paved the way for a hopeful outcome in the 2012 session.
L E G I S L A T I V E U P D A T E
The upcoming 2012 session will be the decennial reapportionment session that happens only once in ten years following the U.S. Census which determines reapportionment and the re-drafting of House and Senate districts. That along with dealing with another year of projected budget deficits, will dominate the session. Because it is a reapportionment session, the gavel goes down in January right after the first of the year and that means that committee meetings will be in the fall rather than in the spring, as is the usual schedule. Accordingly committee meetings crank up in earnest in early September. Your FIADA lobby team is already at work talking with legislators about the upcoming session. We have already had meetings with the Senate President and the Chairman of the Senate Transportation Committee. Over the next few weeks your FIADA Legislative Committee will be drafting our legislative agenda and we will be featuring it in the next issue of the Independent Dealer. In the meantime, enjoy what’s left of summer and get ready to help our Tallahassee team push the FIADA legislative wagon through the upcoming 2012 legislative session.
Make your check payable to FIADA-PAC and mail to: FIADA • 1840 Fiddler Court • Tallahassee, FL 32808 You can also contribute online at www.FIADA.com.
CONTRIBUTOR’S NAME:
DEALERSHIP:
ADDRESS:
$1,000 $500 $250 $100 __________ Monthly Contribution ________
PAC CONTRIBUTIONS
July 2011 — Independent Dealer — 29www.fiada.com July 2011 — Independent Dealer — 29www.fiada.com
“GoldStar GPS – saves us thousands in recovery costs.”
“I can honestly say that GoldStar GPS saves our company thousands of dollars each year, we have had to recover vehicles from Atlanta to Miami and without the aid of Goldstar GPS we would have had little hope of recovering our collateral period. We believe that Goldstar GPS is a crucial component of our success in this market with constantly increasing inventory costs and we won’t sell a car without one of their tracking devices installed.”
866.655.8825 l www.GoldStarGPS.com
Stan Tillman l OwnerTILLMAN AUTOMOTIVE COMPANyJacksonville, FL
CONNECT WITH US
July 2011 Independent DealerJuly 2011© 2011 PrOCONGPS, INC.
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INDUSTRY NEWS
Senate Bill 146 regarding the requirements of civil rights restoration for felony convictions was passed. Pursuant to the approval of the new legislative change, an application for a dealer’s license cannot be denied based solely on the applicant’s lack of civil rights. We will no longer require a copy of the civil rights restoration from applicants. However, we will continue to ask for the charging and disposition documents from an applicant if they have been arrested and/or convicted of felony. Please be aware that the Department does have the authority to deny an application if the crime is related to the motor vehicle business.
Update from DMV: Civil Rights Restorations and Applying for a Dealer’s License
Renewal License Form ChangesForm 86056 DMV’s Application For a License As A Motor Vehicle, Mobile Home, or Recreational Vehicle Dealer, has been revised and posted on-line. It can be accessed through the Department’s website at http://flhsmv.gov/dmv/forms/BFO/86056.pdf. You can find other valuable information on licensing procedures and requirements at the Department’s website at http://www.flhsmv.gov/html/titlinf.html and selecting “Dealer, Manufacturer, Distributor and Importer Information.”
GWC Warranty Corporation (GWC) and Southern Auto Finance Company (SAFCo) announce their vehicle service contract strategic alliance. SAFCo now offers, through its dealers, their exclusive GWC vehicle service contract and GAP program, providing their dealers more tools for profitability and loan customers with peace of mind when purchasing pre-owned vehicles.
“GWC is known for their commitment to automobile dealers and protecting auto purchasers and lenders, which aligns perfectly with our strategic vision for expansion. Our partnership will help SAFCo expand our dealer base as we plan to open 12 states over the next 12 months,” notes Brian Switalski, President of SAFCo.
In today’s economic climate, consumers are choosing to purchase pre-owned vehicles and managing their budget closely. SAFCo is helping them with flexible financing options, and GWC is protecting them against the financial challenges of unpredictable mechanical breakdowns. Satisfied consumers return to dealers for their next purchase and servicing, and performing vehicles lead to better performing loans.
Chris Barry, Vice President of Marketing for GWC, commented, “We are excited to partner with Southern Auto Finance. Through our strategic alliance, SAFCo and GWC are well positioned to better serve our dealer partners and provide car buyers with peace of mind.”
GWC and SAFCo Form Service Contract Strategic Alliance
With instant access through wireless phones, wireless hot-spots and wireless networks it has never been easier to connect with friends and colleagues. Make sure the next
time you log into your Facebook account, you stop over by the new NIADA page
to stay up on the latest news and events circulating at the national and regional level. Don’t forget to “Like” FIADA on
Facebook as well.
Find FIADA and NIADA on Facebook
Chris Barry, Vice President of Marketing for GWC, commented,
Southern Auto Finance. Through our strategic alliance, SAFCo and GWC are well positioned to better serve our dealer partners and provide
With instant access through wireless phones, wireless hot-spots and wireless networks it has never been easier to connect with friends and colleagues. Make sure the next
time you log into your Facebook account, you stop over by the new NIADA page
to stay up on the latest news and
Facebook as well.
Find FIADA and NIADA on Facebook
Does your company have news to share? Email it to us at [email protected].
32 — Independent Dealer — July 2011 www.fiada.com
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