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

OFFICIAL PUBL ICAT ION OF THE M ASSACHUSET TS/NEW ENGL AND INDEPENDENT AUTOMOBILE DEALERS ASSOCIAT IONS

DEALER NEWSM A S S A C H U S E T T S / N E W E N G L A N D

JAN

UA

RY/F

EBRU

ARY

2012

ALSO Compliance OverdrivePLUS Records Retention Guidelines

EXPERIENTIAL MARKETING

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

SEE WHAT’S IN STORE FOR

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D E A L E R N E W S JANUARY/FEBRUARY 2012

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w w w . m i a d a . c o m

MAGAZINECONTENTS

ADVERTISERSINDEX

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TVNIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected] MA/NEW ENGLAND DEALER NEWS IS PUBLISHED BI-MONTHLY BY THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIA-TION 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 OPIN-IONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF INDEPEN-DENT AUTO DEALER OR THE NATIONAL INDEPENDENT ATOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTIS-ERS, OR THEIR IDENTIFICATION AS MEMBERS OF MIADA OR NIADA, DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT © 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED.

STATE MAGAZINE MGR./SALES Troy Graff • [email protected] Andy Friedlander • [email protected]/PRODUCTION MGR. Christy Haynes • [email protected] Nieman Printing


BOARD OF DIRECTORS

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ADESA..............................................................................9AutoTrader.com ................................................................3Auto Use ........................................................................ 13Carco Group ................................................................. 11Lynnway Auto Auction .....................................................5Manheim New England .......................Inside Front CoverNorth Shore Auto Auction ............................................... 7Persian Acceptance Corp ............................................. 10SmartAuction ................................................................. 15Southern Auto Auction .................................... Back CoverStream Companies ............................... Inside Back CoverUnited Acceptance ........................................................ 14

MIADAOFFICE

INSIDE

FOR INFORMATION ON HOW TO BECOME A MEMBER OF MIADA, PLEASE CONTACT BARRY GAGNE AT 781-278-0077 1 UPLAND ROAD BLDG. 200 • STE. 226 • NORWOOD, MAWEB SITE: WWW.MIADA.COM • 781-278-0077

AFTER PERSISTENT REQUESTS DURING the past year from NIADA, our state executive offices and dealer members across the country, CARFAX recently revised its television commercial campaigns.

The latest changes to the campaign were made in August and have been running throughout the fall and winter. Of the notable changes, CARFAX removed the word “Free” from the commercial voiceover, and also removed the phrase “from a reputable dealer.” The revised commercials can be viewed at http://www.youtube.com/user/Carfax

CARFAX is also in the process of testing an entirely new commercial campaign, with a tentative release date of April 2012. NIADA and its dealer members will be active participants in the critical commercial testing phase.

CARFAX also created a new NIADA liaison and client manager position to better assist NIADA, the state association executive offices and individual dealer members. Kathy Collins, the association’s point person with CARFAX, is already hard at work reaching out to several of our state affiliates on some new and exciting partnership initiatives for 2012.

Kathy has set up a new network of CARFAX regional contacts to handle dealer complaints about particular CARFAX VHR discrepancies. If you have questions or issues with any CARFAX reports, please call your state executive office, which will have the new regional and state contact information readily available.

IndustryNews

You Demanded and CARFAX Listened: Ad Campaign Changed

INDEPENDENT DEALERSHIPS NATIONWIDE contribute every day to their communities but often go unrecognized for their community support. While many participate through special projects, others provide sponsorships and financial contributions, or lead innovative community improvement activities.

The NIADA/ Manheim National Community Service Award was created to honor those independent dealerships. Nominees must be members in good standing of the National Independent Automobile Dealers Association and nominations may be made by the dealership, a community business or organization, the state independent automobile dealers association, a community member or even a loyal customer.

Five finalists will be selected, and the winning dealership will be named June 13 at the Leadership Awards Banquet during the Annual NIADA Convention & Expo in Las Vegas. Manheim representatives will present the award, along with a $5,000 check made payable to the dealership’s chosen charity (which must be classified as a charitable organization under section 501(c)(3) of the Internal Revenue Code).

The nomination form can be found by clicking on “Manheim Dealer’s Edge” under the “Services” tab on NIADA.com. Please submit the form, along with the required nomination packet contents, by April 1 to the Community Service Award Selection Committee, NIADA, 2521 Brown Blvd., Arlington, TX, 76006. For additional details please contact Georgia Brown at (800) 756-4232.

NIADA/ Manheim National Community Service Award 2012

IndustryAwards

06 What’s in Store for 201212 Experiential Marketing18 Compliance Overdrive

President of MA John Elefetherakis John’s Auto Sales 617-628-5511 [email protected] VP of MA Bob Hayes Auto Towne Rentals Inc 781-878-9656 [email protected] Treasurer of MA Eric Schneider The Garage 508-583-5955 [email protected]

Clerk of MA Melissa Otis Oakland Auto Sales 508-822-8822 [email protected] Chairman of MA Ben Donnarumma Allstar Auto Sales [email protected] President of NE Lou Tedeschi A.S.P.I. Motor [email protected]

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BHPHNews

What’s in Store for 2012

WHAT’S IN STORE FOR YOUR STORE IN 2012? If it’s anything like 2011, it should be another good year to be in the Buy HerePay Here industry. The coming year will not be without its challenges, though. In fact, there are certain areas of the industry that could be more challenging than ever.To get an idea of what to look forward to

in 2012, we first need to review how 2011 treated the BHPH world. It was probably the weirdest year I can remember in the 15plus years I’ve been in the business. Tax season was sporadic at best, which pretty much set the tone for all facets of the business for the rest of the year. From a profitability standpoint, the dealers

I have the distinct privilege of working with enjoyed an 11 percent overall increase in 2011 versus 2010. This increase was due mostly to the rightsizing of operations. Dealers focused on their entire operations, from top to bottom, on cutting the fat and running their operations based on the cash they were generating instead of relying on lines of credit.I expect this focus to continue in 2012.

Though funding sources have become more readily available, most dealers will be focusing again on generating the capital necessary to run their businesses from their businesses. As always, there will be dealers looking to grow aggressively through borrowing, and rates will continue to make this a very viable option. I don’t see rates rising drastically in the coming year, so it will still be a good time to borrow.Having said that, I still see it being more

difficult to secure new lines of credit in 2012. It’s going to take some patience and the willingness to educate some institutions about our industry.Our dealer clients saw sales volume

increase by almost 6 percent in 2011 despite

a sporadic tax season. Not a recordsetting year by any means, but this was driven more by cash management. Dealers seemed to want to sell what their cash flow dictated rather than sell as much as possible. We all know we can sell as many vehicles as we want or have the financial resources to in this industry. There doesn’t seem to be a lack of customers needing or wanting what we have to offer. The same will hold true for 2012. We

should have the customers in the market to sell as much as we want. The biggest question will be inventory availability. Now, I’m normally a glasshalffull kind of guy, but when it comes to this, I think the glass may be half empty. Even though the prices somewhat leveled off the last half of last year, the numbers seem to be dwindling even more than usual. Portfolio performance in 2011 included

some stabilization from a dollarloss standpoint, but from a numberloss standpoint, there was a slight increase or worsening in 2010. This was driven by a couple of factors, beginning with the need for inventory. Some dealers accelerated their repo times when a desirable unit was involved. This also helped stabilize the dollar losses, as vehicles were repossessed earlier and in better condition and thus earned higher recovery amounts.The other factor was a renewed focus

on underwriting and the overall collection process. Dealers remained more disciplined in both areas, seeking quality over quantity.There will be more of the same this

year. Dealers have seen the error of their past ways and are enjoying the spoils of their more disciplined labor. I expect the average chargeoff to remain essentially the same and the number as a percent of sold to remain higher than in past years,

and collections dollars to improve as well as overall collection effectiveness.The biggest thing to affect our industry in

2012 will come from the compliance front. The Consumer Finance Protection Act was signed in July 2010, establishing the Consumer Finance Protection Bureau. The rules of the Act were to have been drafted by August 2011, so we were hoping to know what kind of field we will be playing on. But, as with most things in our government, the rules are behind schedule. In the interim, I have already heard from a few dealers who have received a letter from the FTC – the Bureau’s governing body – informing them of pending audits. That has dealers debating whether to

remain in the industry, and is causing some who are looking at getting into the industry to delay their entry until the rules are set. This act and bureau are going to separate the men from the boys, so to speak. The dealers who are trying to the best of their ability to do the right things will survive, while those who operate in the gray areas will fall by the wayside. And the waysiders are going to cause the cost of doing business to increase for everyone else.So here is the best advice I can give to

dealers, as well as those wanting to get into the business in the coming year: Don’t wait. Don’t wait to get compliant. Don’t wait to spend a little money to do so. Don’t wait to review all processes and procedures. Don’t wait to review all expenses. Don’t wait to review all of your employees. Don’t wait to train. And definitely don’t wait to sell cars, collect money, and make money.

THE DEALERS WHO ARE TRYING TO THE BEST OF THEIR ABILITY TO DO THE RIGHT THINGS WILL

WHILE THOSE WHO OPERATE IN THE GRAY AREAS WILL FALL BY THE WAYSIDE.

BY BRENT CARMICHAEL

NCM ASSOCIATES INC.

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Records Retention GuidelinesTHE BEGINNING OF THE TAX YEAR usually triggers a mad scramble to locate all of the necessary documents to prepare tax returns.If you retain absolutely all of your records, you might be faced with the

monumental task of sorting through the mountains of paper to locate the documents you actually need. One occasionally needs to clear away unused items, but tossing the wrong paper or deleting a necessary data file can have dire consequences, especially for a business.When disposing of documents, you may want to consider shredding.

When you establish a records retention policy, some things to consider are:! Is there a legal requirement for keeping the document?! Could the item serve any other purpose after it is used for its intended purpose? Would the documents be needed to support or oppose a position in an investigation or litigation? Could the document support a tax deduction?! What is the consequence of not being able to locate the document?! Can the item be reliably reproduced if needed?! How long should documents be retained?! Keep any document related to pending or threatened litigation until the matter is settled and all appeals are exhausted.

Here are some general rules for how long to keep other records:One year: Duplicate deposit slips, I9s (after termination), receiving sheets.Twentyfive months: Customers’ credit applications that were denied.Three years: General correspondence, employment applications, expired

insurance policies, petty cash vouchers.Four years: Freight bills; inventory lists; invoices; bank deposit slips,

reconciliations, statements, canceled checks; contracts – purchase and sales; depreciation records (retention begins after expiration); employee expense reports.Five years: OSHA logs; photostat, carbon or other facsimile copies of each

odometer mileage statement issued or received. Auction companies are required to keep records of the “most recent owner,” presumably the seller, as well as the name of the buyer, the vehicle identification number and the odometer reading on the date the auction company took possession of the motor vehicle.Six years: Employee payroll records (W2, W4, annual earnings records –

retention begins after termination).Seven years: Accident reports; general ledger; accounts payable and

receivable ledgers; bank statements; checks (most); contracts and leases (expired); electronic funds transfer documents; employee personnel records (after termination); expense analyses; product, materials and supplies inventories; notes receivable ledgers; purchase orders and time books and cards.Eleven years: Worker’s compensation documents.Twenty years: Real estate records.Indefinitely: Accountants’ audit reports; cash books; account charts;

construction documents; important correspondence; deeds, mortgages, bills of sale and titles; depreciation schedules; financial statements; general ledgers; journals; licenses; loan documents; minute books of directors and stockholders, including bylaws and charter; property appraisals; articles of incorporation; bylaws; tax returns and worksheets and trademark registrations.Employee records should be retained for the length of the employee’s tenure

with the company, plus at least the statute of limitations period. Employment records may contain sensitive information and should be stored in a secure area. Immigration and Naturalization Services’ I9 forms should be kept separate from active employee files to avoid discrimination claims.A copy of each version of employment and training manuals should be kept

with the dates that version was in use.

A D D I T I O N A L I N F O R M A T I O N R E G A R D I N G B U S I N E S S R E C O R D S R E T E N T I O N C A N

P 5 5 2 . P D F .

IndustryUpdate

Learn More

IN NOVEMBER, THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION (NHTSA) and the Environmental Protection Agency (EPA) issued a joint proposal regarding new fuel economy and greenhouse gas emission standards for passenger cars and light trucks for model years 2017 through 2025. !e proposed Corporate Average Fuel Economy (CAFE) standards range from 40.1 mpg in model year 2021 to 49.6 mph in model year 2025.

Detailing the costs and bene"ts of the program, the proposal states, “!e agencies estimate that fuel savings will far outweigh higher vehicle costs.” !e report estimates the technologies required to achieve the fuel economy standards will add, on average, $2,000 to the cost of MY 2025 vehicles, while fuel savings are forecast to range from $5,200 to $6,600 over the life of the vehicles.

Based on those costs and savings, the proposal calculates it will take four years for a consumer purchasing a MY 2025 vehicle with cash to realize savings. Consumers "nancing a MY 2025 vehicle on a "ve-year loan are projected to realize a cash #ow savings of about $12 per month during the loan period.

!e proposed standards for MY 2017-2025 include new options for manufacturers to achieve compliance. Beginning with MY 2017, manufacturers will be able to generate fuel consumption improvement values for improvements in air conditioning system e$ciency to comply with the CAFE standards. !ey will also be able to apply savings from “o%-cycle” technologies such as solar panels on hybrids, adaptive cruise control or active aerodynamics. In addition, the proposal includes manufacturer incentives encouraging hybridization of full-size pickup trucks.

!e agencies’ joint proposal was published in mid-November, and public comments will be accepted through mid-January. For more information, the rule and related documents can be accessed on the NHTSA’s CAFE website at www.nhtsa.gov/fuel-economy.

BY ADR STAFF

CAFE Standards Update

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THE LATEST EQUIFAX NATIONAL CREDIT Trends Report declared auto "nance companies have signi"cantly increased lending. In fact, the growth is more than 47 percent during the past two years.

Analysts discovered auto "nance lenders outpaced bank and credit union lending to subprime borrowers during the past two years, as well. Equifax de"nes subprime borrowers as consumers with credit scores less than 640.

According to the most recent monthly report, there were 854,800 auto "nance company-originated loans in July, compared to 581,300 for July 2009. Equifax tabulated that vehicle loans to subprime borrowers now account for 38.5 percent of all auto loan originations for auto "nance companies and 17.6 percent for banks and credit unions — numbers that are quickly approaching pre-recession levels.

By contrast, analysts pointed out 820,200 loans were originated by banks and credit unions for the same period in July, versus 832,000 for July 2009. !at’s a decrease of less than 2 percent.

Equifax mentioned delinquency rates continue to improve for outstanding vehicle loans currently 60 or more days past due.

Michael Koukounas, senior vice president of special client services for Equifax, indicated the rate is now down to 1.63 percent of loans, compared to a peak that was near 3 percent. Koukounas believes the decline re#ects a continuation of sustained credit retraction that the auto lending industry is experiencing earlier than other loan types.

“With unemployment rates remaining elevated for a prolonged period, auto lenders have proactively adopted more comprehensive data and veri"cation tools for greater loan-level transparency in evaluating a wider band of consumers, which has helped enable the auto lending industry to recover more quickly than others,” Koukounas explained.

To support his theory, Koukounas pointed out that in July, 1.7 million auto loans were originated, worth $32 billion collectively. From January through July, he said, 11.3 million new auto loans were originated — a 13.2 percent increase over the same span last year.

!e collective amount of these loans is 14.8 percent greater than in 2010, climbing to $213.9 billion.

Equifax’s report also revealed the average monthly payment has remained relatively unchanged during the past year. For auto "nance company-originated loans, the payment ticked up to $407 in July from $404 in the same month last year. For bank and credit union-originated loans, the payment slid down to $364 in July from $377 in July of last year.

Equifax insisted the changes clearly show that the growth the industry is experiencing is tied to increases in number of loans rather than an increase in average loan amount.

SUBPRIME AUTO FINANCENEWS

Subprime Auto Loans are on the Rise

IndustryNews

WORL

D AUTOMOBILE

CHAMPIONSHIP

THIS YEAR’S WORLD AUTOMOBILE AUCTIONEERS Championship will be webcast live for the very "rst time, courtesy of NIADA.TV. !e live webcast of the 2012 WAAC can be viewed in its entirety on the home pages of www.niada.tv, www.niada.com and www.waacnet.net . !e live online coverage of the event begins at 11 am ET on Friday, March 3O, 2012 and is free for all online viewers. Cheer on your hometown favorite Auctioneers and Ringmen, and catch all of the fun and excitement of the 2012 World Automobile Auctioneers Championship at your leisure, exclusively on all three websites. For more detailed information please visit www.niada.com and click on the “EVENTS” tab or call (303) 807-1108.

World Automobile Auctioneers

Championship

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JANUARY/FEBRUARY 2012 D E A L E R N E W S

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IN TODAY’S ECONOMIC ENVIRONMENT, there is a great deal of fraud taking place and if you aren’t careful, it could be your wallet and reputation that suffers.To prevent fraud and protect both dealers

and the general public, many dealers are utilizing the National Motor Vehicle Title Information System, or NMVTIS. The system, run by the U.S. Justice Department, was created to prevent the introduction of branded or stolen motor vehicles into interstate commerce, thus protecting auto dealers and consumers from fraud and reducing the use of stolen vehicles for many other illicit purposes.Through NMVTIS, businesses and

consumers are empowered to check the VIN of any vehicle they are considering acquiring at an exceptionally low cost. Readily available to used auto dealers, providers of NMVTIS data also encourage wholesalers, among others, to check VINs before investing in vehicles, thus keeping them even one step further from unsuspecting buyers.The data available through NMVTIS is

unique in that, unlike commercially available services, it’s a government program with strict regulations regarding reporting. NMVTIS information includes timely data from state motor vehicle agencies and other entire sectors (such as insurance, auto recyclers, junkyards and salvage businesses) that are addressed by the AntiCar Theft Act.Regulations require all states to participate

in the NMVTIS program, and all entities are required to provide specific information to NMVTIS in a specific format. This uniformity is intended to serve as a reliable source of title and brand history for autos, and also elevates the likelihood that a vehicle stolen in Maine will be caught if resold in Florida. The accuracy and timeliness, of the information,

is what differs from private vehicle history reporting services.Information is updated by most states in

real time and, at a minimum, by all states within several days of any transaction occurring. The system contains more than 30 million salvage and total loss records, and imposes strict penalties on entities that fail to report required information. NMVTIS also includes information on buses, trucks, motorcycles, recreational vehicles, motor homes and tractors.As a dealer, there are certain scenarios that

should be investigated before investing in a used auto, and NMVTIS is the most accurate, costeffective source of this information. In addition to accurate, timely information on a vehicle’s title history, the system can flag any brands given to a used vehicle, as well as provide salvage and total information, and odometer readings. This means it’s likely that a vehicle that has been flood, or totaled and rebuilt, or even had the odometer tampered with, will be identified. According to the DOJ, the existence

of NMVTIS has led to a decline in motor vehicle thefts. By reducing the market for stolen vehicles, a natural decline in thefts was sure to follow. In Virginia alone, a 17 percent decrease in thefts was reported the state engaging with NMVTIS. Arizona, one of the first and most active NMVTIS participant states, has experienced a 99percent recovery rate on stolen vehicles. And in Florida, a car theft ring responsible for cloning more than 250 cars, valued at $8 million, was disbanded.Does this mean dealers are now safe

due to the mere existence of NMVTIS? Unfortunately, they are not. There are still land mines to be aware of. NMVTIS is designed to collect information from states, but not change or streamline laws and terminology to from state to state. Each state has its own laws and terminology, which may be different from its neighbors. That’s why it’s important to know the definitions in the states you are searching (if you find a used vehicle has a history there). The NMVTIS service provider has a glossary of most terms on its website.It is also important to know a NMVTIS

Vehicle History Report is intentionally concise, and is only intended to provide data on the five key indicators associated with preventing theft and fraud. If your needs go beyond these indicators, it may be best to supplement your NMVTIS search with additional reports from other providers who specialize in different types of information.

NMVTIS Created to Help Dealers

IT IS ALSO IMPORTANT TO KNOW A NMVTIS

VEHICLE HISTORY REPORT IS INTENTIONALLY CONCISE,

AND IS ONLY INTENDED TO PROVIDE DATA ON THE FIVE

KEY INDICATORS ASSOCIATED WITH PREVENTING THEFT

AND FRAUD.

IndustryInfo

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DOES THE BRAND DEFINE THE EXPERIENCE — or is it the other way around? With the changing landscape of marketing and communications, it has become clear that a brand is only as good as its online customers say it is. It’s the collective experiences of consumers that really drive the success of branding efforts in today’s social and often instantaneous marketplace.While the challenge of marketers will

always be to identify and communicate effectively with target audiences, new challenges have emerged:How do we create positive, memorable

experiences that attract and retain customers? And how do we encourage customers to

share their experiences with others?One possible answer: Experiential

marketing.Experiential marketing allows users to

interact with a brand and its products or services firsthand, often in a controlled environment. This area of marketing aims to appeal to emotions, logic and the senses, and it provides an opportunity for customers to engage with a brand. This engagement aims to diminish the disconnect between what a company says about its offerings and what customers actually encounter. Sounds pretty awesome, right? Perhaps

it’s something your business or organization should look into. For a bit of initial inspiration, take a cue from some of the ways big brands are using experiential marketing: At trade shows: Trade shows offer

the perfect opportunity for marketers to try experiential marketing tactics because they provide an ideal venue for testing new products and services. Consider car shows. For years, auto manufacturers have used national shows to unveil the latest in concept cars. By allowing visitors to sit in the cars, feel them, touch them, and all but drive them

away, they’re able to create an emotional tie to a new product — one they hope gets people talking. Keep those conversations going long after the show by distributing mementos like reflector tags or carshaped stickynote pads to commemorate visitors’ experience at your booth. In advertisements: Advertisements actually laid the foundation for other tactics of experiential marketing. Think of perfume ads in magazines, coupons in the Sunday paper or magnets stuck in direct mail pieces: they make consumers interact with the advertisement to receive a fuller product experience.While online has taken over much of the

modern marketing share, traditional channels of communication can work just as well when experiential marketing is executed. Take billboards, for one.In April 2010, the Ministry of Internal

Affairs Netherlands, in partnership with Bitmove, introduced an interactive billboard in Amsterdam to challenge people’s lack of response to acts of public aggression. The billboard used technology to pick up images of people walking by and placed them in a prerecorded violent situation, which was streamed on the billboard as though it were happening at that very moment. When people realized they were actually on the billboard, they stopped to watch themselves (vanity works every time) and were then lured into the campaign’s powerful message. Not only did this billboard earn the attention of passersby, it also provided four key tips people could use should they find themselves in a similar situation.Through product demonstrations:

What better way to show consumers how your product is different and superior to the competitor’s than by letting them find out firsthand? American winemaker Beringer’s did just that. Partnering with the agency Marketing

Werks, Beringer’s took to the road in a shiny silverbullet trailer for branded product demonstrations they called “Urban Picnics.” Beringer’s goal was to showcase how a great wine can bring the Napa Valley lifestyle anywhere.Urban Picnics took Beringer’s, and Napa,

nationwide. Consumers enjoyed a taste of wine country with demonstrations and foodpairing suggestions from Beringer’s executive chef. Winetasting completed the experience and sealed in the results: 24,000 program impressions, 1,248 wine samples and 503 leads generated.Even if you don’t have Beringer’s budget,

you can still take a page from its book. Grab a portable booth and a few eyecatching banners to set up a product demonstration outside your office – at a local business or park (with permission, of course) or other hightraffic area – to get your customers talking.Using guerilla tactics: There is an overlap

between experiential marketing and guerilla marketing in some cases — it can be an aggressive, inyourface experience to evoke some sort of action in a target audience. For example, in July 2010, UNICEF installed “dirty water” vending machines in Manhattan to create public awareness about the dangers of not having clean drinking water. There were eight flavors available, representing the eight common diseases affecting impoverished communities around the world: malaria, cholera, typhoid, dengue, hepatitis, dysentery, salmonella and yellow fever. Many people donated cash on the spot. UNICEF also offered a mobile component that allowed consumers to donate later via text.

De!ne a Brand Through Experiential Marketing

MARKETING ALLOWS USERS TO INTERACT WITH A BRAND AND ITS PRODUCTS OR SERVICES FIRST-HAND, OFTEN IN A CONTROLLED ENVIRONMENT.

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THERE ARE COMMON misconceptions in small business when it comes to selecting a credit card processor. We would like to help you clarify some of these so you can select what is right for your business.

One low rate: One of the most common misconceptions business owners have when they select a credit card processor is that they will only be paying one low rate. More often than not, when a payment processing sales rep pitches his services he only quotes the rate for qualified transactions – something like 1.29 percent. This leads the business owner to believe that’s the only rate he will ever be charged for payment processing services.In reality, there are many more undisclosed

rates, often much higher than the original quoted rate. These are known as mid and nonqualified rates and are applied depending on the type of card used and how those cards are accepted. For example, a

corporate credit card will always be charged at a higher rate than a personal debit card. So there will never be just one rate for all payment processing services.

Free equipment: Another common misconception is the illusion of “free equipment.” As we all know, things are seldom truly free. Payment processing companies often tell business owners they will give them cardswiping equipment for “free” when they switch to their processing services. They will often make the equipment appear to be worth much more than it actually is to make it seem they are giving the business owner a great deal.In reality, that pricey cardswiping

equipment can be purchased elsewhere for significantly less than what most processors lead you to believe. Because of high and undisclosed processing rates and junk fees, many small businesses end up paying for their equipment many times over throughout

the term of their contract.

Junk Fees: Companies will spread the misconception that extra fees such as statement fees, data security fees, batch header fees, monthly minimum fees and a host of other junk fees are necessary administrative costs to keep payment processing services operating. The truth is, there are costs to maintain processing services, but the majority of junk fees are typically never disclosed by sales reps in the quote provided to the business owner. These fees are honestly “junk fees” that are simply lining someone’s pocket and further cutting into the business owner’s profit.

NOVERAPAYMENTSOLUTIONS.COM/MIADA OR CALL

Clearing Up Credit Card Misconceptions

CreditNews

IN REALITY, THERE ARE MANY MORE UNDISCLOSED RATES, OFTEN MUCH HIGHER THAN THE ORIGINAL QUOTED RATE.

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New vAuto Tool Blends AutoTrader, Manheim ToolsVAUTO HAS INCORPORATED THE DATA TOOLS of AutoTrader.com and Manheim in Provision, its new used car inventory management tool, designed to give dealers a comprehensive way to find used cars to stock at the right price.The company’s first major product introduction since it was bought by

AutoTrader last year, Provision blends the resources of AutoTrader and Manheim to help dealers tackle the three “W’s” of inventory management: What cars to stock, what to pay and where the car can be found.“This is a business intelligence breakthrough for the automotive

industry, made possible through our alliance with AutoTrader.com and Manheim,” vAuto founder Dale Pollak said. “Provision brings gamechanging insights and tools to help dealers efficiently and effectively know what vehicles to stock, what to pay and where to find them—all with a realtime, precision approach.”Provision allows dealerships to set targets for used inventory value,

age, turn rates and gross profits. The tool then conducts a sevenpoint diagnostic test for all available used units, basing the test on supply and demand in the market. It also offers recommendations on pricing based on market response, reconditioning costs and the dealer’s profit goal and can check auction run lists.Pollak said automatic transport scheduling with vendors will be offered

in the future.“Provision goes a long way to eliminating the ongoing pain of used

vehicle sourcing and management challenges at dealerships,” Pollak said. “We’ve built a bridge between the top retail and wholesale marketplaces and made it easy to cross.”“It’s a perfect blend of our people and respective market intelligence,

technologies and resources to create a winwin for everyone,” Manheim president Sandy Schwartz said. “Provision will be a transformative force for the industry.”For more information, visit www.vauto.com/provision.

SAFEPAK CORPORATION, MAKER OF ELECTRONICALLY monitored deposit stations and ATM security products for banks, is entering the car business with a new line of electronic key control products aimed at dealerships.SafePak’s Electronic Key Control Systems, priced

from $1,995 up, can handle from five to 500 keys. The KeyStations range from from simple wallmount and countertop varieties to vaultlike freestanding kiosks for maximum key security.SafePak featured its systems at the the recent

International Autobody Congress and Exposition and the SEMA show, and the response led the company to add more key control products, SafePak president Buzz Siler said. “We looked at all the competition’s products in this

key management field and saw a huge gap,” he said. “We decided that, with the right investment in the latest technology, we could offer every feature that they did, but at much lower prices.”Siler previously created the first remote access key

dispenser for Cendant/Avis/Budget, a rental kiosk and lock dispenser for the selfstorage industry and specialized key dispensers for the aviation and hotel industry.For more information, visit http://safepakcorp.com/key

control.

Security Is Key as SafePak Adds New Product for Dealers

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16


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DEALER MEMBERSHIP APPLICATION

Date _____________ New Member: ______ Renewal: ______

_____ One Year $399 ______ Two Year $749 _____ Three Years $1099

Company Name: __ ___________

Owner/Manager/Contact: _________________________________________________________

Dealer Plate #: ______________________

Business Address: ______

City/State/Zip: __________ ______

Mailing Address, if different: _______________________________________________________

City/State/Zip: _________________________________________________________________

Phone: _____________________ Fax: _____________________ Cell: ___________________

E-mail Address: Co. Website: ___________

Check all that apply: Do you sell your cars: Wholesale ______ Retail ______ Internet _______

Number of cars sold monthly _________ Number of cars licensed to have on your lot _______

_____ Check enclosed _____ VISA _____ MC _____ Discover _____ AmEx

Please make check payable to MIADA, ph: (781) 278-0077, fax: (781) 278-0099

Send to: MIADA, 1 Upland Road, Building 200, Suite 226, Norwood, MA 02062

Name as it appears on the card:____________________________________________________

Card Number: _________________________________ Exp. Date: ________ V-Code: _______

This signature certifies that I am eligible for membership in MIADA as a licensed Class II dealer,

and that this application, if accepted, binds me to uphold the Bylaws and Constitution of MIADA,

its Code of Ethics, and all local, state and federal laws pertaining to the used car industry. In

addition, I give my permission for MIADA to contact me via phone, fax, and email with

information pertaining to membership or industry related news.

Signature: _______________________________________________ Date: ________________

Referring Member: ____________________________________ Dealership: ________________

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18


What is Your Agreement?

WHEN IT COMES TO THE AGREED-ON SALES finance terms between a dealer and a buyer, a lot of questions need to be addressed to avoid misunderstandings and, consequently, compliance and legal troubles for a dealership.What is the “agreement?” Is it in the

credit application, buyer’s order, conditional delivery agreement, tradein summary, manufacturer’s warranty, retail contract, other documents, or in some combination of them? If the terms are found in many documents, how do you know which ones? In short, if you can’t easily determine

which documents comprise your complete sales financing agreement then you are going to have challenges enforcing it. If the terms of those documents don’t all agree with each other, you are also going to have challenges enforcing them. A strategy to avoid confusion is to say one

document comprises the entire agreement between the parties. For example, a retail installment sales contract (RISC) may include a provision (usually near the signatures) that the entire sales financing agreement between the parties is in the RISC. This makes the RISC the one and only document containing the entire and final terms of the transaction. This is a “merger” or “integration” clause because it merges or integrates all terms into one agreement. The advantage is that if there is litigation, the one and only document needed to interpret the rights and responsibilities of the parties is the RISC. But a recent court decision highlights how

the advantage of a merger clause can turn into a disadvantage. In Duval Ford v. Rogers (District Court of Appeals, Florida, 2011), the court held that a dealer could not enforce its arbitration provision in the buyer’s order. Why? Because the RISC included a merger clause, saying that it contained the entire agreement between the dealer and buyer. Since the arbitration provision wasn’t in the RISC (and wasn’t included by reference), it fell outside the terms of the agreement. This was a case in which the merger clause kept out terms the dealer wanted to be a part of the final agreement. That disadvantage of a merger clause

can be overcome with an adjustment to the clause. A variation of the single document approach is including in the RISC specific references to other documents saying they are also a part of the merged terms. Together, the RISC and the referenced documents describe the entire agreement between the parties.For example, the RISC could say the

parties signed a separate conditional delivery agreement, which is incorporated into and made a part of the RISC by reference. The RISC could also note that

warranty documents are provided separately, including the Federal Trade Commission’s used car window form. Incorporating other documents by reference allows the parties to agree that a specific set of documents comprise the entire agreement. If you use this approach, you need to make sure the RISC includes crossreferences to all the separate documents you want included in your final agreement. It may sound like you should incorporate

everything by reference into the RISC – that way you have it all covered. Not so. Another recent Florida decision points out the potential danger of including other documents. In Cuello v. Maroone Honda of Miami (Cir. Court, 11th Judicial Cir., Florida, 2011), the court found it was inconsistent to have RISC terms that purported to be final but then have a separate conditional delivery agreement saying the terms might not be final. The court held that the inconsistency created a Truth in Lending violation and corresponding state statute violations.One lesson from that case is that the

documents you choose to represent the entire sales financing agreement need to be consistent with each other (though whether the RISC and conditional delivery agreement are truly inconsistent is controversial and a topic unto itself). The RISC should include a crossreference and maybe even a brief explanation about the other specifically included documents so all parties understand that they work together and why. Perhaps another lesson from the Cuello

case is that dealers should carefully choose the documents they want to be enforced as part of the final sales financing agreement between the parties. For example, preclosing documents may reflect incomplete terms or terms in flux due to information not yet available or in negotiation. They might not include additional warranty protection or service products a buyer decides to purchase at closing. Merging those documents and terms would potentially create confusion about the actual agreedon final terms. The market’s response to recent Florida

cases is still being determined. For now, it is clear that in Florida, or any other state, the best course of action is to review and determine which documents are intended to be a part of your final sales financing agreement with a buyer and then confirm that your RISC and other documents make it clear.

BY CHIP ZYVOLOSKIChip Zyvoloski is a senior attorney

for indirect lending at Wolters

Kluwer Financial Services. For more

information, visit www.wolterskluwerfs.

com/indirect.

ComplianceOverdrive

MIADA RAISES OVER $8,000 FOR MARINE TOYS FOR TOTS PROGRAMDONATIONS INCLUDE OVER 750 TOYS

THROUGHOUT THE MONTH of November, !e Massachusetts Independent Automobile Dealers Association (MIADA) ran a very successful toy drive for the Marine Toys for Tots program.

!e Association, a non-pro"t trade association based out of Norwood, whose mission is to who inform, protect, educate and represent the integrity and honor of the Independent Automobile industry throughout the Commonwealth and to promote fair dealing for consumers, called upon its large member base for help. !rough generous donations and time volunteered by members, the drive exceeded expectations. !e drive culminated with a party and ra&e thrown by MIADA at !e Green Briar in Brighton MA on December 2nd., 2011

!e total donations exceeded $8,000, including over 750 toys and cash donations. 100% of the proceeds from the toy drive all went to the Marine Toys for Tots program to help make this holiday season better for those less fortunate.

For more information or to make a donation, you can contact MIADA on their website at www.miada.com, or directly by contacting Executive Director Barry Gagne at 781-278-0077. You can also contact Toys for Tots Directly by Contacting Sergeant Matthew Laroche at 617-737-0500

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