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DECEMBER 2012

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O F F I C I A L P U B L I C A T I O N O F N I A D A N E V A D A

V i s i t u s a t w w w . n i a d a . c o m

DEALER NEWS

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L I K E U S A T N I A D A . C O M

WHATS NEW

MAGAZINE CONTENTS

ADVERTISERS INDEX

04 A Virtual F&I Manager06 Negative SEO?08 Blueprint for Legislative Success12 Government Report16 Money Matters18 Compliance Overdrive

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM WWW.NIADA.TVNIADA HEADQUARTERS: 2521 BROWN BLVD. ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR TROY@NIADA.COM.The Nevada Dealer News 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 offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Nevada Dealer News or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright 2012 by NIADA Services, Inc. All rights reserved. STATE MAGAZINE MGR./SALES Troy Graff troy@niada.comEDITOR Andy Friedlander andy@niada.comART DIRECTOR Christy Haynes christy@niada.comPRINTING Nieman Printing

OFFICEFOR INFORMATION ON HOW TO BECOME A MEMBER PLEASE CONTACT CINDY SIRKEL. CINDY@NIADA.COM 800-756-4232

ADESA ........................................Inside Back CoverAlly ....................................................................11Auto Search Technologies ..................................14AutoTrader.com .....................................Back CoverChase ................................................................16Dealer Center ......................................................7Dodah.com ........................................................13Lobel Financial .....................................................9Manheim.com ............................ Inside Front CoverProtective ............................................................5United Acceptance .............................................17Voisys ................................................................18Westlake Financial .............................................15

insideChinese-made counterfeit airbags have been used as replacement parts for as many as

230,000 used vehicles that have been involved in a crash over the past three years, the National Highway Traffic Safety Administration warned.

The NHTSAs tests showed the black-market fake airbags, which look like certified original equipment parts right down to the manufacturers logo, either dont deploy at all on impact or explode, sending fiery shrapnel toward the drivers face.

The airbags are being sold to independent repair shops as original equipment, the NHTSA said. The agency has compiled a list of makes and models for which the counterfeit airbags are known to exist, but admitted it does not yet know the full scope and scale of the problem and said the list is likely to evolve over time. The list is available at www.safercar.gov.

Cars that have had their airbags replaced by independent shops or by airbags purchased online during the past three years are at risk, the NHTSA said. Owners of such vehicles are asked to contact the call center established by their cars manufacturer to have the vehicle inspected and the airbag replaced if necessary. The list of call centers and other information is also available at www.safercar.gov.

In August, federal agents arrested a North Carolina auto mechanic and discovered more than 1,500 counterfeit airbags, according to various media reports. The case was reportedly linked to a case last year in Tennessee, in which a Chinese citizen pleaded guilty to trafficking in counterfeit airbags and was sentenced to 37 months in prison.

The NHTSA said no deaths or injuries have been tied to the counterfeit bags but said it is unclear whether police accident investigators would be able to identify a fake airbag from a real one after a wreck.

WA R N I N G

NHTSA Warns of Counterfeit Airbags

WEAR WHAT YOU WANT. WE CANT SEE YOU.

www.niada.tv

SALES OPERATIONS F&I REMARKETING COMPLIANCE LEGAL/REGULATORY

SPECIAL FEATURES INDUSTRY EVENTS

AUTOMOTIVE INDUSTRY NEWS & SPECIAL MONTHLY PROGRAMS

stay connected and stay social

L I K E U S A T N I A D A . C O M

us on FacebookVisit

In November and December, more than 4 million American businesses, including 740,000 retailers, will receive 2012 Economic Census forms. Responses to the questionnaire are required by law to be returned by Feb. 12.

Every five years, the government conducts the Economic Census to develop a comprehensive portrait of American business, from the national to the local level, relying on timely and accurate data.

The U.S. Census Bureau has created a web page __ business.census.gov __ to provide information about the Economic Census as well as statistics businesses can use to assess and grow their business operations.

The site includes webinars and videos to educate businesses about the census and what it means to them, as well as a section geared toward small businesses. FOR MORE INFORMATION, VISIT BUSINESS.CENSUS.GOV.

Economic Census Coming Soon

E C O N O M I C N E W S

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A DV E R T O R I A L

INDEPENDENT DEALERS NEED NEW F&I MANAGER

Having had the pleasure of serving automobile dealers for more than 50 years, we at 3URWHFWLYH$VVHW3URWHFWLRQDUHFRPPLWWHGWRPHHWLQJWKHQDQFHDQGLQVXUDQFHQHHGVof our dealer customers.

Like many readers of this magazine, we place great importance on industry studies to ensure we are on top of the latest market trends and in particular, your needs. However, we recognize selling cars is more than numbers and charts. Its a people business.

We spend countless hours working to support dealers of all sizes and types. Were in the car business and a lot of what we do still takes place with a meeting, a handshake, leadership and good in-store training.

0RUHWKDQYHGHFDGHVRIH[SHULHQFHDQGGRLQJEXVLQHVVWKHROGIDVKLRQHGZD\KDVSRVLWLRQHG3URWHFWLYHWRH[FHHGWKHH[SHFWDWLRQVRIRXUGHDOHUFXVWRPHUV

In our goal to share proven dealer solutions, we turned to the largest audience the growing group of independent auto dealers. We wanted to better understand what you UHDOO\QHHGWRKHOSIXUWKHUGULYH\RXU),VDOHVDQGSURWV

We asked many of you from across the county questions about your operations, current selling processes and the importance of F&I to your businesses. Your feedback was informative and insightful, and aligned with many of the current successful approaches we use today.

Here is a snapshot of what we learned: When we inquired about the types of vehicles and service contracts being sold

today, we learned the average vehicle sold is 3-7 years old with 50,000-100,000 miles on it. We discovered more than 65 percent of you sell vehicle service contracts in your dealership.

When we inquired how Protective could better support you, we learned that ease of doing business is very important, followed by working with a company you can trust. On the technology front, 55 percent of you use or plan to use an electronic device such as an iPad or a tablet device to educate your current and future consumers about F&I products.

We found that in general, consumers still rely on good, quality education from you to learn about the value of a service contract and most consumers dont have preconceived ideas about what that value really offers them.

The study reinforces what Protective Asset Protection already does well: helping dealers make money selling F&I products.

So what is the best way to help you be more productive, drive more revenue and increase customer retention within the F&I process?

We think the answer is obvious hire an F&I manager. No one said it was a simple VROXWLRQ%XWDQH[SHULHQFHG),PDQDJHUEULQJVWKHNQRZOHGJHDQGVNLOOVWRSURYLGHcustomers with the best options and the true value of making an F&I purchase decision.

Obviously, adding to your headcount is no small task, and we asked ourselves what ZHFRXOGGR6RZHGHFLGHGWROO\RXU),SRVLWLRQIRU\RX

Okay, we didnt hire an F&I manager for each independent dealer. Instead, we FUHDWHGWKHPDQDJHU%\FRPELQLQJ\RXUFULWLFDO),QHHGVZLWKRXU\HDUVRIH[SHULHQFHZHEXLOW3URWHFWLYHV3URWHFWLRQ3OXV6ROXWLRQGHVLJQHGH[FOXVLYHO\IRU\RX

You might have guessed your new F&I manager is not actually a person but instead is an electronic sales presentation using an iPad, or a desktop/laptop-based solution.

:KLOHRXUQHZVWUDWHJ\PLJKWQRWUHSODFHDQH[SHULHQFHG),PDQDJHUVNQRZKRZand sales ability, it does provide you a tool to increase service contract sales. With our new F&I solution, you have the ability to offer a vehicle service contract customized WRWKHVSHFLFQHHGVRI\RXUFXVWRPHUDOOZLWKHDV\WRXVHWHFKQRORJ\GHVLJQHGWRovercome objections and help close the sale.

We want you to have the closest thing we could provide to an actual F&I manager. Protectives Protection Plus vehicle service contract and supporting web/iPad app will SURYLGH\RXDQG\RXUGHDOHUVKLSZLWKWKHQH[WEHVWWKLQJ

3URWHFWLYH$VVHW3URWHFWLRQORRNVIRUZDUGWRH[SDQGLQJRXUQDWLRQZLGHUHDFKDQGworking with independent dealers to introduce them to their new F&I manager. You can learn more about the technology and our goal to bring you innovative new ideas and SURWJURZWKVWUDWHJLHVE\YLVLWLQJZZZQHZIDQGLPDQDJHUFRP

BY RICK KURTZSENIOR VICE PRESIDENT-DEALER SERVICES FOR PROTECTIVE ASSET PROTECTION HAS MORE THAN 23 YEARS OF INDUSTRY EXPERIENCE. PROTECTIVE ASSET PROTECTION PROVIDES F&I PRODUCTS FOCUSED ON ENHANCING PROFITABILITY AND CUSTOMER SATISFACTION. FOR MORE INFORMATION, CALL 800-950-6060, EXT. 5755, EMAIL RICK.KURTZ@PROTECTIVE.COM OR VISIT PROTECTIVEASSETPROTECTION.COM.

While the National Insurance Crime Bureau (NICB) warned of the potential for fraud regarding vehicles affected by +XUULFDQH6DQG\7KH$VVRFLDWHG3UHVVreported the dire predictions of hundreds RIWKRXVDQGVRIRRGGDPDJHGYHKLFOHVZDVZD\RIIWKHPDUN$FFRUGLQJWRLQVXUDQFHFODLPGDWD

UHYLHZHGE\$3DERXWFODLPVKDYHEHHQUHFHLYHGE\YHPDMRULQVXUDQFHcarriers in the area, far fewer than H[SHFWHG

Early estimates predicted the storm that hit the densely populated Northeast to result in more damaged cars than the 600,000 affected by Hurricane Katrina, ZKLFKKLWWKH*XOI&RDVWLQ1$'$VHQLRUDQDO\VW/DUU\'L[RQVDLGDVPDQ\DV200,000 vehicles could end up scrapped EHFDXVHRIWKHVWRUP

But that apparently is not the case, VDLG)UDQN6FDGLDVSRNHVPDQIRUWKHNational Insurance Crime Bureau, an insurance company group that monitors IUDXGDQGRWKHUWUHQGV+HVDLGLQVXUHUVwatched by his group are logging far fewer FODLPVWKDQWKH\GLGZLWK.DWULQD,WGRHVQWWUDQVODWHWRWKHUHVJRLQJWR

EHFDUVRXWRIWKLVWKLQJMXVWbecause this is such a huge geographic VWRUPKHWROG$3

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dealers often try to conceal from potential buyers the fact that vehicles have been damaged by a natural disaster, NICB SUHVLGHQWDQG&(2-RH:HKUOHVDLG$IWHU.DWULQD1,&%HVWDEOLVKHG

9,1&KHFNDIUHHVHUYLFHWKDWDOORZVLQGLYLGXDOVWRFKHFNLIDYHKLFOHKDVHYHUEHHQGHFODUHGDVVDOYDJHE\RQHRI1,&%VPHPEHULQVXUDQFHFRPSDQLHV9,1&KHFNLVDYDLODEOHDWZZZQLFERUJ

I N D U S T RY N E W S

Sandy Not as Hard on Vehicles as Expected

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Negative SEO?:KHQ\RXUVWKHDUWKHZRUGV

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A BLUEPRINT FOR SUCCESS

6LQFHWKHSDVVDJHRIWKH:DOO6WUHHW5HIRUPDQG&RQVXPHU3URWHFWLRQ$FWLQDOVRNQRZQDVWKH'RGG)UDQN$FWIHGHUDODQGVWDWHUHJXODWRUVKDYHbeen clamoring with interest in the QDQFLDODUPRIWKHDXWRPRWLYHLQGXVWU\VSHFLFDOO\WKH%X\+HUH3D\+HUH%+3+VHJPHQW7KHLQWHUHVWLQ%+3+KDVQWEHHQ

limited to only regulators, but has also been fueled by state legislators, the media DQGVRPHFRQVXPHUDGYRFDWHJURXSV,WVEHHQD\HDUVLQFHWKH/RV$QJHOHV

Times published a three-part series SUROLQJDODUJHO\RQHVLGHGSRUWUD\DO RI%+3+:LWKLQZHHNVWKUHHELOOV were introduced in the California legislature that sought to impose a wide, VZHHSLQJFKRNHKROGRQ%+3+RSHUDWRUVLQWKHVWDWH8QWLOWKHQQRWPDQ\RXWVLGHWKH

LQGXVWU\KDGWDNHQDUHDOLQWHUHVWLQfollowing the operational complexities of %+3+6XGGHQO\IRUWKHUVWWLPH LQDYHU\SXEOLFZD\%+3+ZDVXQGHU a microscope and the legislative die ZDVFDVW0DQ\ZHUHDVNLQJLILWZDVUHDOO\

possible that those bills were written DVDNQHHMHUNUHDFWLRQWRWKHVHULHVRIoverly sensational /$7LPHVVWRULHV7KHDQVZHUXQIRUWXQDWHO\LV\HV

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DQGRWKHULQGXVWU\VWDNHKROGHUVSXOOHGup chairs to watch the drama unfold in &DOLIRUQLDPDQ\%+3+GHDOHUVEHJDQWRwonder how they would tell the intensely FXVWRPHUVHUYLFH%+3+VWRU\WRVWDWHlegislators, committee members and their

VWDIIV7KHUHZDVJURZLQJFRQFHUQDERXWKRZWKH%+3+LQGXVWU\ZRXOGFRPHWRJHWKHUDQGJKWWKHWR[LFSURYLVLRQVLQ&DOLIRUQLD6HQDWH%LOO$VVHPEO\%LOODQG$VVHPEO\%LOOVHHVLGHEDU$VWKHFRPPLWWHHDVVLJQPHQWVLQWKH

&DOLIRUQLD6HQDWHDQG$VVHPEO\ZHUHbeing handed down, the Independent $XWRPRELOH'HDOHUV$VVRFLDWLRQRI&DOLIRUQLD,$'$&1,$'$VVWDWHDIOLDWHEHJDQWROD\WKHJURXQGZRUN for its approach to the legislative FDPSDLJQ*HQHUDOO\1,$'$GRHVQWengage in state legislative activities that is normally directed by our state associations but given the far-reaching and restrictive nature of the California ELOOVLWZDVGHFLGHGWKDW1,$'$ZRXOGSDUWLFLSDWHKHDYLO\

With each passing committee hearing, it became more apparent the fate of the bills was being dictated by party-line votes, and our direct opposition to the premise of the bills was falling on GHDIHDUV0XFKRIWKHFRPPLWWHHWHVWLPRQ\

we saw in support of the bills consisted of consumers telling customer service stories that would not have been solved E\WKHELOOVSURYLVLRQV2QHFDUEX\HUcomplained that a car she bought with IRXUPLVPDWFKHGWLUHVZDVXQUHOLDEOH6KHWRRNWKHYHKLFOHEDFNWRWKHGHDOHUDQGXOWLPDWHO\JRWKHUPRQH\EDFNIRUWKHFDU3UREOHPVROYHG

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'HDOHUVZHUHH[SHFWHGWREHDJDLQVWthe bills, but many local and county JRYHUQPHQWRIFLDOV&KDPEHUVRICommerce and concerned consumers EHJDQWRYRLFHWKHLURSSRVLWLRQDVZHOO:HIRUPHGWKH&RDOLWLRQWR3URWHFW2XU)UHHGRPWR'ULYHFRPSOHWHZLWKDZHEVLWHDQG)DFHERRNSUROH$VRXURSSRVLWLRQVXSSRUWJUHZZH

EHJDQWRDVNOHJLVODWRUVWRORRNPRUHclosely at how the passage of the bills ZRXOGLPSDFWVWDWHVDOHVWD[UHYHQXHV:HFDOOHGIRUDVFDOLPSDFWVWXG\Based on our internal industry data DQGSUHOLPLQDU\UHVHDUFK1,$'$determined that losses in revenue for California could range anywhere from $220 million to $330 million GROODUVDQQXDOO\7KDWZDVFRUURERUDWHGE\&DOLIRUQLDV

%RDUGRI(TXDOL]DWLRQZKLFKDJUHHGthat such revenue losses would have a devastating downstream effect for county and local governments that rely heavily on state funding for basic constituent VHUYLFHVOLNHSROLFHDQGUHSURWHFWLRQ$GGLWLRQDOO\ZHYRLFHGRXUFRQFHUQ

that the passage of the bills would in fact be a violation of the equal protection clauses of the constitutions of California DQGWKH8QLWHG6WDWHVDVNLQJRQHsegment of the auto industry to play by operational guidelines that do not DSSO\WRWKHHQWLUHLQGXVWU\7KDWZDVDQDUJXPHQWZHZHUHSUHSDULQJWRPDNHLQthe courts, if necessary, in opposition to 6%&RQFHUQHGPRVWO\ZLWKEORFNLQJWKH

inherently overreaching restrictions on %+3+GHDOHUVSURSRVHGLQ6%ZHIRFXVHGOHVVRQ$%DQG$%Though we fundamentally opposed DOOWKUHHELOOVRXU%+3+FRDOLWLRQIHOWWKHUHZHUHSURYLVLRQVLQ$%DQG$%WKDWZRXOGPDNHVHQVHWRprotect consumers and would not unduly LPSHGH%+3+RSHUDWLRQV8OWLPDWHO\DOOWKUHHELOOVSDVVHGWKH

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ZHUHVHQWWR*RY-HUU\%URZQIRUQDOSDVVDJHRUYHWR2XUIRFXVWKHQVKLIWHGto lobbying the governor, his chief legislative counsel and the state agencies charged with providing regulatory RYHUVLJKWWRWKHLQGXVWU\RQSDVVDJH2Q6DWXUGD\6HSWDGD\

before his veto power was set to expire IRUWKLV\HDUVOHJLVODWLYHVHVVLRQ*RY%URZQYHWRHG6%VD\LQJKHZDVQRWyet convinced the evidence merits the UHJXODWRU\RYHUVLJKWRIWKLVELOO1,$'$FRXOGQWDJUHHPRUH:LWK

RQHVWURNHRIWKHSHQ6%ZDVGHDGFor now, we all breathed a collective VLJKRIUHOLHI$VIRUWKHPHGLDDQGFRQVXPHU

advocates, they claimed victory for SDVVLQJ$%DQG1,$'$ LVQHZLWKWKDWZHGLGQRWVHH those new laws unduly impeding %+3+RSHUDWRUV$IWHUWKHYHWRWKH/$7LPHV reporter

who wrote the original series of articles ZURWH%+3+GHDOHUVFRQJUDWXODWHGRQHDQRWKHURQ6XQGD\DQGFUHGLWHGDlobbying effort that had little impact on ODZPDNHUVEXWDSSDUHQWO\FDXJKWWKHJRYHUQRUVHDU$JDLQZHFRXOGQWDJUHHPRUH&OHDUO\

our lobbying efforts were never given FUHGHQFHE\&DOLIRUQLDVOHJLVODWRUVbecause they were either unwilling or incapable of seeing what the governor VDZ7RSURYLGHFRPPRQVHQVHFRQVXPHUSURWHFWLRQ\RXGRQWKDYH to do it at the expense of devastating VPDOOEXVLQHVV,QWKHHQG*RY%URZQVYHWRJDYH

HYHU\RQHZKDWWKH\ZDQWHG7KHconsumer advocates received additional SURWHFWLRQWKDW1,$'$LQIDFWEHOLHYHV%+3+GHDOHUVVKRXOGEHRIIHULQJtheir customers, and the industry was shielded from excessive, business-HQGLQJUXOHPDNLQJWKDWZRXOGKDYHironically led to less access to affordable transportation for the very consumers the legislators and media were trying WRSURWHFW6KRXOGVLPLODULVVXHVDULVHQH[W\HDU

1,$'$ZLOOEHSUHSDUHGWRHQWHUWKHIUD\WRSURWHFWRXUPHPEHUVDJDLQ0RVWLPSRUWDQWO\OHWVQRWIRUJHWWKLVwould not have happened without WKHFRPELQHGHIIRUWVRIWKHLQGXVWU\VVWDNHKROGHUVZRUNLQJWRJHWKHUQDWLRQDOO\and in California, marshaling our UHVRXUFHVDQGPDNLQJRXUFROOHFWLYHvoice heard on behalf of our dealers and WKHLUFXVWRPHUV

BY STEVE JORDANNIADA CHIEF OPERATING OFFICER

Heres a look at the requirements of Senate Bill 956, Assembly Bill 1447 and Assembly Bill 1534:SB 956Would have required BHPH dealers to:/IXQV\MZM[\ZI\M[I\XMZKMV\XT][\PMNMLZI\MK]ZZMV\TaWVM&NW]Z\PWNXMZKMV\

;J\IQVITQKMV[M]VLMZ\PM/ITQNWZVQI2QVIVKM8MVLMZ[8I_IVLJMZMO]TI\MLJa\PM0MXIZ\UMV\WN/WZXWZI\QWV[

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AB 1447Requires BHPH dealers to:

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L AT E S T G OV E R N M E N TA L I S S U E S

NIADA Legislative Team Update+HUHVDUXQGRZQRIVRPHRIWKH

latest governmental issues and activity affecting the used car industry from 6DQWH(VSRVLWRRI)HGHUDO$GYRFDWHVDQG1,$'$OHJLVODWLYHUHJXODWRU\FRPSOLDQFHFRXQVHO6KDXQ3HWHUVHQ

Auction Sales:KLOH&RQJUHVVKDVQRWRIFLDOO\VDLG

anything on the issue in months, there is, as previously reported, still interest IURP6HQ3U\RUDQGWKH+RXVH(QHUJ\and Commerce Committee in exploring the impact of the current auction sale process on consumers and law HQIRUFHPHQW7RWKDWHQG6WHYH/HKUPDQOHJLVODWLYH

DVVLVWDQWWR6HQ3U\RUYLVLWHG$'(6$V:DVKLQJWRQDUHDDXFWLRQIDFLOLW\RQ$XJWRYLHZKHDXFWLRQSURFHVVUVWKDQG$WWKHHQGRIWKHYLVLW/HKUPDQVDLG the senator and other interested OHJLVODWRUVGRQWKDYHDSUREOHPZLWKwhat goes on at the auction but could KDYHLVVXHVZLWKZKDWKDSSHQVZLWKWKHDXFWLRQHGFDUV/HKUPDQDVNHGLI1,$'$FRXOG

provide some thoughts regarding how to address that situation, especially as it relates to law enforcement, but we prefer not to respond until we receive more FODULFDWLRQDVWRH[DFWO\ZKDWLVVXHSUREOHPOHJLVODWRUVDUHWU\LQJWRVROYH5HJDUGOHVVOHJLVODWLRQLVQRWOLNHO\WR

EHLQWURGXFHGWKLV\HDU

Rental Cars (S.1445, S.3502 and H.R. 6094)

There have been reports that consumer advocates are nearing a deal with rental car companies on the issue of banning rentals of motor vehicles under safety recall until the defect or QRQFRPSOLDQFHLVUHPHGLHG6RIDUWKHUHLVQRWKLQJGHQLWLYHDQGLWVQRWFOHDUwhether the rumored deal would require OHJLVODWLRQ$ELOOFRYHULQJWKHUHQWDOUHFDOO

LVVXH6ZDVLQWURGXFHGLQE\6HQ&KXFN6FKXPHU'1

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Buyers, sellers and consigners across the independent auto auction industry can now seamlessly use ShipCarsNow from Auction Edge Inc.s auction management platform, allowing customers to ship multiple vehicles to multiple destinations and take advantage of built-in volume pricing.6KLS&DUV1RZLVSDUWRI8QLRQ3DFLF

which transports approximately one out of three new cars sold in the U.S. With more than 1,300 quality trucking companies under contract and strategic ties with major railroads, ShipCarsNow offers nationwide, door-to-door rail and direct truck service at competitive pricing. ShipCarsNow provides Auction Edge members with the capability to transport cars safely and securely, supported by 24/7 customer service.

We want to make it as easy and as FRVWHIFLHQWDVSRVVLEOHIRURXU$XFWLRQEdge customers to manage shipping and delivery of their sales and purchases, Auction Edge senior vice president Scott Finkle said. Dealers and consigners with AuctionACCESS IDs will be able to set up a ShipCarsNow account with a couple of clicks and start shipping vehicles immediately.

For more information, visit www.shipcarsnow.com or call 866-207-3360.

Auction Edge, a national remarketing platform that powers more than 130 independent auto auctions in North America, also introduced a new function that allows key auction employees to view credit lines and available credit for dealers with Automotive Finance &RUSRUDWLRQ$)&RRUSODQVHQDEOLQJauction personnel to help the dealer FRPSOHWHSXUFKDVHVDQGTXLFNO\RRUSODQtheir vehicles through AFC.

FOR MORE INFORMATION, VISIT WWW.AUCTIONEDGE.COM.

I N D U S T RY N E W S

Auction Edge Integrates with ShipCarsNow, AFC

Department of LaborLast year, the Department of Labor

QDOL]HGDUXOHWRHOLPLQDWHWKHRYHUWLPHexempt status for service writers and service advisors. But as part of the departments 2012 appropriation legislation, Congress prohibited the department from using any funds to enforce that rule.

That appropriation legislation expires in March, and the prohibition will also expire unless it is extended by new legislation.

Internal Revenue ServiceThe Financial Crimes Enforcement

Network (FinCEN) announced that a variety of businesses, including auto GHDOHUVDUHQRZDEOHWRHOHFWURQLFDOO\OHForm 8300, Reports of Cash Payments Over $10,000 Received in a Trade or Business, using the Bank Secrecy $FWHOHFWURQLFOLQJV\VWHPDWKWWSEVDHOLQJQFHQWUHDVJRYPDLQKWPO

E-Filing is a free system that allows businesses to submit their FinCEN reports through a secure network. Paper OLQJVRI)RUPZLOOFRQWLQXHWRbe accepted for now, but businesses are encouraged to begin E-Filing.

Federal Trade CommissionThe FTC has published a guide called

0DUNHWLQJ

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&RQJUHVVHQDFWHGWKHIHGHUDO%DQNUXSWF\&RGHLQDQGLWKDVEHHQDPHQGHGVHYHUDOWLPHVVLQFH7KHSURFHGXUDODVSHFWVDUHJRYHUQHGE\EDQNUXSWF\UXOHVDQGWKHORFDOUXOHVRIHDFKEDQNUXSWF\%.FRXUW7KHUHDUH%.FRXUWVRQHLQHYHU\IHGHUDOMXGLFLDOGLVWULFWLQWKHFRXQWU\7KHFRXUWRIFLDOZLWKWKHGHFLVLRQ

PDNLQJSRZHULQHDFKGLVWULFWLVD8QLWHG6WDWHVEDQNUXSWF\MXGJH0XFKRI%.process is administrative and conducted DZD\IURPWKHFRXUWKRXVH,Q&KDSWHU and 13 cases, the ones that affect dealers and lien holders, the process is carried out E\DWUXVWHH

Whats the Difference?7KHFRQVXPHUEDQNUXSWFLHVWKDWDIIHFW\RX

PRVWZLOOEHOHGDV&KDSWHURU&KDSWHUChapter 7 liquidation: $FKDSWHU

FDVHGRHVQRWLQYROYHWKHOLQJRIDSODQ

RIUHSD\PHQWDVLQFKDSWHU,QVWHDGWKHWUXVWHHJDWKHUVDQGVHOOVWKHGHEWRUVnonexempt assets and uses the proceeds to pay holders of claims (creditors) in accordance with the provisions of the %DQNUXSWF\&RGH

Chapter 13 wage earner plan: Chapter 13 offers individuals a number RIDGYDQWDJHVRYHU&KDSWHUOLTXLGDWLRQincluding an opportunity to save their KRPHVIURPIRUHFORVXUH%\OLQJXQGHU&KDSWHULQGLYLGXDOV

can stop foreclosure proceedings and may cure delinquent mortgage payments RYHUWLPHWKRXJKWKH\PXVWVWLOOPDNHDOOmortgage payments that come due during WKH&KDSWHUSODQRQWLPH

Chapter 13 allows individuals to reschedule secured debts, other than a mortgage for their primary residence, and

H[WHQGWKHPRYHUWKHOLIHRIWKHSODQ7KDWFRXOGORZHUWKHSD\PHQWV&KDSWHUalso has a special provision that protects third parties who are liable with the GHEWRURQFRQVXPHUGHEWVDSURYLVLRQWKDQFDQSURWHFWFRVLJQHUV&KDSWHUDFWVOLNHDFRQVROLGDWLRQ

ORDQXQGHUZKLFKWKHLQGLYLGXDOPDNHVpayments to a trustee, who then GLVWULEXWHVSD\PHQWVWRFUHGLWRUV$Q\LQGLYLGXDOHYHQLIVHOIHPSOR\HG

or operating an unincorporated business, is eligible for Chapter 13 relief as long as WKHLQGLYLGXDOVXQVHFXUHGGHEWVDUHOHVVWKDQDQGVHFXUHGGHEWVDUHOHVVWKDQ$FRUSRUDWLRQRUSDUWQHUVKLSFDQQRWEHD&KDSWHUGHEWRU

How Chapter 13 Works $&KDSWHUFDVHEHJLQVE\OLQJ

DSHWLWLRQZLWKWKHEDQNUXSWF\FRXUW

Understanding Your Customers Chapter 13 BankruptcyT H E F I R S T O F A T H R E E - PA R T S E R I E S O N T H E B A S I C S O F B A N K R U P T C Y P RO C E D U R E S A N D W H AT I T M E A N S T O D E A L E R S / L I E N H O L D E R S .

MONEY MATTERS

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serving the area where the debtor has DUHVLGHQFH8QOHVVWKHFRXUWRUGHUVRWKHUZLVHWKHGHEWRUPXVWDOVROHschedules of assets and liabilities, a schedule of current income and expenditures, a schedule of contracts and unexpired leases, and a statement of QDQFLDODIIDLUV:KHQDQLQGLYLGXDOOHVD&KDSWHU

petition, an impartial trustee is appointed to evaluate the case and serve as a disbursing agent, collecting payments IURPWKHGHEWRUDQGPDNLQJGLVWULEXWLRQVWRFUHGLWRUV7KHEDQNUXSWF\FOHUNJLYHVQRWLFHRIWKHEDQNUXSWF\FDVHWRDOOcreditors whose names and addresses are SURYLGHGE\WKHGHEWRU

Between 21 and 50 days after the GHEWRUOHVWKHSHWLWLRQWKHWUXVWHHZLOOKROGDPHHWLQJRIFUHGLWRUV7KHGHEWRUthe trustee and those creditors who wish to attend will then come to court for a KHDULQJRQWKHUHSD\PHQWSODQ7KHGHEWRUPXVWOHDUHSD\PHQWSODQ

with the petition or within 14 days after WKHSHWLWLRQLVOHG7KHSODQPXVWEHsubmitted for court approval and must SURYLGHIRUSD\PHQWVRI[HGDPRXQWVto the trustee on a regular basis, typically ELZHHNO\RUPRQWKO\7KHWUXVWHHthen distributes the funds to creditors according to the terms of the plan, which can offer creditors less than full payment RQWKHLUFODLPV,IWKHGHEWRUZDQWVWRNHHSWKH

collateral securing a particular claim, the plan must provide that the holder of the secured claim receive at least the value of WKHFROODWHUDO,IWKHREOLJDWLRQXQGHUO\LQJthe secured claim was used to buy the collateral such as a car loan and the debt was incurred within certain time IUDPHVEHIRUHWKHEDQNUXSWF\OLQJWKHplan must provide for full payment of the GHEWQRWMXVWWKHYDOXHRIWKHFROODWHUDO,IWKHFRXUWFRQUPVWKHSODQWKH

trustee will distribute funds received XQGHUWKHSODQDVVRRQDVLVSUDFWLFDEOH

Making the Plan Work2QFHWKHFRXUWFRQUPVWKHSODQ

WKHGHEWRUPXVWPDNHWKHSODQVXFFHHGE\PDNLQJUHJXODUSD\PHQWVWRWKHtrustee either directly or through payroll GHGXFWLRQZKLFKUHTXLUHVOLYLQJRQD[HGEXGJHWIRUDSURORQJHGSHULRG:KLOHFRQUPDWLRQRIWKHSODQHQWLWOHVWKHGHEWRUto retain property as long as payments are made, the debtor cannot incur new debt ZLWKRXWFRQVXOWLQJWKHWUXVWHH

1H[W7KHEDVLFVRI&KDSWHUOLQJV

1RWH7KHLQIRUPDWLRQSUHVHQWHGVKRXOGQRWEHFLWHGRUUHOLHGXSRQDVOHJDODXWKRULW\DQGVKRXOGQRWEHXVHGDVDVXEVWLWXWHIRUUHIHUHQFHWRWKH86%DQNUXSWF\&RGHDQGWKH)HGHUDO5XOHVRI%DQNUXSWF\3URFHGXUH

BY ROD HEASLEY ROD HEASLEY IS EXECUTIVE VICE PRESIDENT OF PERITUS PORTFOLIO SERVICES , A SOUTHLAKE, TEXAS-BASED SPECIALTY FINANCE COMPANY THAT SPECIALIZES IN THE PURCHASING OF OPEN BANKRUPTCY ACCOUNTS.

:KHQDQLQGLYLGXDOOHVD&KDSWHUSHWLWLRQDQLPSDUWLDOWUXVWHHLVDSSRLQWHGWRHYDOXDWHWKHFDVHDQGVHUYHDVDGLVEXUVLQJDJHQWFROOHFWLQJSD\PHQWVIURPWKHGHEWRUDQGPDNLQJGLVWULEXWLRQVWRFUHGLWRUV

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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.

7KH\HDUVHQGLVDWLPHRIUHHFWLRQ:KHQLWFRPHVWRDXWRQDQFHDQG

compliance challenges, the story can sound similar from year to year. There are usually a handful of new regulations facing dealers and lenders that have made a big impact on the industry over the previous 12 months.

%XWWKLV\HDUGRHVQWUHDOO\WWKHPROG7KDWVbecause 2012 arguably hasnt been as much about new regulation as about the additional scrutiny of regulators enforcing laws that have been in place for some time.

That has been particularly evident in the DUHDVRIVWDWHVSHFLFIRUPVPRGHOODQJXDJHand loan documentation.

6RPHUHFHQWH[DPSOHVVXJJHVWDWUHQGthat state regulators are taking a closer look DWH[LVWLQJPRWRUYHKLFOHUHWDLOVDOHVQDQFLQJauthority and transaction documentation:

New Mexico: 6LQFHD1HZ0H[LFRattorney generals regulation has required creditors to provide a summary or a translation of English-language transaction documents in consumer sales negotiated in a language other than English. Its coverage is very broad and VRPHZKDWGLIFXOWWRXQGHUVWDQG

7KLV\HDUWKH1HZ0H[LFRDWWRUQH\general proposed additional changes to the regulation. After receiving comments, the

AG acknowledged issues with the proposed FKDQJHVDQGZLWKWKHH[LVWLQJUHJXODWLRQLWVHOIAs a result, it pulled back the changes and UHSHDOHGWKHH[LVWLQJUHJXODWLRQWRDOORZIRUfurther study.

Michigan: Years ago, the Michigan Department of Licensing and Regulatory Affairs, 2IFHRI)LQDQFLDODQG,QVXUDQFH5HJXODWLRQ(OFIR) said bad check charges are not allowed in motor vehicle retail contracts in spite of statutory authority that seems to allow it.

This year, the OFIR published a letter saying bad check charges cannot be collected on retail motor vehicle sales contracts unless the contract contains a bad check charge provision, indirectly reversing its prior position. The OFIR now holds that bad check charges are allowed DVORQJDVWKH\DUHVSHFLFDOO\DXWKRUL]HGLQWKHretail contract.

Montana: The Montana late charge authority is a bit ambiguous and has been that way for many years. Because of the ambiguity, there were vastly different interpretations in the marketplace. In response to a request, the Montana Division of Banking and Financial Institutions recently published a letter clarifying its interpretation of the state statute.

The apparently heightened state scrutiny might be just a coincidence. It could also be that states are demonstrating their diligence and control to the public and to the new federal Consumer Financial Protection Bureau (CFPB).

The CFPB regulates dealers who dont URXWLQHO\DVVLJQWKHLUQDQFLQJFRQWUDFWVWRXQDIOLDWHGWKLUGSDUWLHV)RUWKHPRVWSDUWWKDWmeans the CFPB regulates Buy Here-Pay Here dealers. The Federal Trade Commission (FTC) continues to regulate the rest of the auto sales DQGQDQFHLQGXVWU\

The net result is there are two federal UHJXODWRUVLQWKHDXWRQDQFHPDUNHWSODFH,WVpossible states are more actively clarifying and HQIRUFLQJWKHLUH[LVWLQJODZVDQGUHJXODWLRQVin an effort to maintain a level of control over WKHDXWRQDQFHLQGXVWU\KRSLQJWRPLQLPL]Hfederal oversight.

,QDGGLWLRQWRUHHFWLQJRQWKH\HDUWKDWhas been, its also time to think about what might lie ahead. What will the new regulatory environment look like in 2013?

Many thought the CFPB would have done DORWRIUHJXODWRU\FKDQJHLQDXWRQDQFLQJE\now, but that hasnt been the case. One reason LVLWKDVEHHQIRFXVHGRQUHDOHVWDWHQDQFLQJpractices and disclosures. The CFPB also seems to be carefully studying the consumer QDQFHPDUNHWSODFHDQGHYHQFRQVXPHUV to lay a solid foundation for its regulatory oversight.

The CFPBs strategic plan for 2013-18 notes one of its strategies is to develop and maintain DQHIFLHQWIDFWEDVHGDSSURDFKWRGHYHORSLQJHYDOXDWLQJUHYLVLQJDQGQDOL]LQJUHJXODWLRQV

)DFWEDVHGLVDNH\WHUP:HKDYHseen the CFPB asking good questions and FRQGXFWLQJH[WHQVLYHUHVHDUFKRQDUHDVLWLV

WDVNHGZLWKRYHUVHHLQJ)RUH[DPSOHWKH&)3%tested draft real estate disclosure documents with consumers in shopping malls.

The Dodd Frank Act requires the CFPB to research and provide policy guidance on whether arbitration provisions should be allowed in consumer credit (non-real estate) transactions. To start that process, the CFPB published a request for suggestions, data sources and strategies to study the issue.

Its also clear the CFPB is not afraid to take a fresh approach to presenting transaction LQIRUPDWLRQWRFRQVXPHUV)RUH[DPSOHthe CFPB published a proposed rule in July regarding integrated mortgage disclosures under RESPA and the Truth in Lending Act. Leading up to the proposed rule, it published a number of drafts trying various new disclosure formats and designs.

7KDWZDVRQHRIWKHUVWVLJQLFDQWSURSRVHGrules from the CFPB, and the planning process LQYROYHGH[WHQVLYHUHVHDUFKDQGVROLFLWDWLRQRIindustry and consumer feedback. As a result, WKHSURSRVHGUXOHDQGH[SODQDWRU\PDWHULDOVDUHmore than 1,000 pages.

The upside is the CFPB is trying practical, consumer-tested ways to present information so average consumers can understand key transaction terms. The downside is the volume of information in the proposal is overwhelming.

Its hard to know when the CFPB will complete its foundation-building and begin SURSRVLQJQHZUHJXODWLRQVRUUHYLVLQJH[LVWLQJRQHVWKDWDIIHFWWKHFRQVXPHUDXWRQDQFHindustry. Its likely big changes will come to the market. Its just unclear when.

While were in this waiting period, dealers might feel there are a lot of variables out of their control, but the focus needs to be on the areas you can control.

Since a number of states seem to be IRFXVHGRQFODULI\LQJDQGHQIRUFLQJH[LVWLQJrequirements, dealers should review and button down compliance documentation and processes to make sure they are satisfying those requirements.

Additionally, reviewing and tightening transaction standards and communication within the dealership is key. Make sure your VDOHVDQGQDQFHWHDPVDUHGHVFULELQJQDQFLQJWHUPVDQGRSWLRQVYHKLFOHIHDWXUHVand add-on products and services in a correct and consistent manner. Educate your buyers and be direct and honest about each element of a transaction and the risks each party is assuming.

Investing in those areas can go a long way toward maintaining compliance now and preparing for what lies ahead.

C O M P L I A N C E OV E R D R I V E

Out with the Old and In with the New?

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