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ALSO Video MarketingPLUS Compliance Overdrive

NEIADA CONVENTION INFORMATION

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PAIDDALLAS, TEXASPermit No. 2079

DEALER UPDATESN E B R A S K A I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I A T I O N

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JANUARY/FEBRUARY 2012 D E A L E R U P D A T E S

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W W W . N E I A D A . C O M

WE HOPE YOUR HOLIDAYS have been good and the year ended on an up note. As we begin the new year and start making new year’s resolutions, here at the Nebraska IADA we hope that at the top of your list is becoming more active in your association – by becoming a member if you are not already and by attending the annual state convention.

This year we will be back in Kearney, Neb., at the Holiday Inn, Feb. 17, 18 and 19. This year is especially important as the 35th annual convention the Nebraska IADA has put on. There have been a lot of changes over the years, and while there been many new faces, there are also a couple that have been there from the beginning. We would really like to see a lot more new faces this year.

Education is the theme of the convention every year, with seminars on a variety of subjects. At press time, we were still lining up speakers. As always, we will have a representative from the DMV and the Licensing Board there. Ask a dealer who has gone to a convention in the past and he

will tell you what a great time this is. We try to make this a family event and make it a great time for all. Again this year, we will be having a casino night Friday evening. The pool is a great attraction for the kids – a fun place for them to enjoy themselves in the middle of winter.

During the annual convention, Saturday night is the auxiliary fun auction. This auction raises money for the auxiliary to fund its scholarship program. Every year, graduating high school children or grandchildren of members of the association win scholarships to a higher education facility, whether a university or a community college.

As the new year begins, so does the legislative session. Part of what your association dues pay for is to ensure that on both the state and national level there are lobbyists working for you, the dealer. Gary Merritt is the lobbyist for the Nebraska IADA and will again be monitoring what is going on at the state capitol. Much of the time, people do not see what is in all the bills that are introduced each year. There can be 800-1,100

bills introduced, and it takes time to scan all the bills to see which ones affect our industry. We also belong to the state chamber for more input on bills that can have an effect on dealers in some form or another.

So all of us here at the Nebraska IADA hope you will make us part of your New Year’s resolutions. We hope the top two items will be:

•��I�will�join�the�Nebraska�IADA�and�have�a�voice in what happens in my industry.

•��I�will�plan�to�attend�the�annual�Nebraska�IADA state convention in February to learn a lot, get together with fellow independent car dealers and have a great time.

Thank you from the staff and officers of the Nebraska IADA,

Jan Merritt, Executive Director Gary Merritt, Assistant Director, Lobbyist Doug Borgmann, President Nyla Borgmann, Auxiliary President Kate Merritt, Auxiliary Secretary Treasurer

Pat Holmes Sings in ‘Patriotic Parade’

Pat Holmes, wife of Kermit Holmes, the Nebraska rep for Automotive Services

Co., sings in a women’s barbershop

chorus called The Belles-A-Peelin’, a group of about 37 singers. This is the second year Kermit has invited us to attend their performance and Kate and I had a great time again, as they put on a wonderful show.

This year’s show was a salute to veterans, called “A Patriotic Parade.” It included songs such as The Star Spangled Banner, Boogie Woogie Bugle Boy and God Bless America, just to name a few. The Belles finished their part of the afternoon show with an Armed Forces medley, singing the songs of the Army, Navy, Coast Guard, Marines and Air Force and having veterans of each branch stand up during their song.

The show also featured the sounds of a Nebraska-based women’s barbershop quartet called Fever and a men’s choir called The Nebraska City Apple Corps.

The finale was a real show-stopper – all three groups joined together with the audience standing and sang America The Beautiful.

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Many of you may remember longtime Lincoln car dealer Mel Allen of A-1 Motors. Mel was an active member of the association who attended many state conventions. After marrying his wife Jackie in the mid 1990s, Mel moved to Alabama and opened a car lot. He continues to sell cars.

On Nov. 12, Mel was back in town to celebrate his 90th birthday at his granddaughter Tawnya Douglas’ house. Mel’s granddaughter and her husband flew him back to Lincoln so he could be around old friends and family for his birthday. Of course, we would not miss such a chance to visit with an old friend. In attendance were friends, family and other car dealers. I remember Mel from before he moved to Alabama, and Jan has known him since he first joined the association many years ago. For those of you who would like to contact Mel and say hi, please call our office. Mel still has a wholesale license to buy and sell cars in Alabama and said he just renewed it for one more year. Way to go, Mel!

Happy New Year From Your State Association

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BY GARY MERRITT

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D E A L E R U P D A T E S JANUARY/FEBRUARY 2012

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OFFICERSPresident Doug Borgmann Creighton Auto Sales P.O. Box 365 Creighton, NE 68729 402-358-5252

President ElectDennis DeNovellis Sidney Auto Sales 1229 Illinois Ave. Sidney, NE 69162308-254-3921

Vice President Dale CotnerDales Trucks625 S. Lincoln Ave. York, NE 68467 402-362-5933

Secretary-TreasurerLes Bockmann Bockmann Auto Sales P.O. Box 93 St. Paul, NE 68873308-754-5645

DirectorsRoger Bohrer Catherland Auto Sales 642 N. Webster Red Cloud, NE 68970 402-746-3780

Dean Cerny Columbus Auto Mart 2817 13th St. Columbus, NE 68601 402-564-4952columbusautomart.com

Andy Chase ABC Auto 3801 N. 70th St. Lincoln, NE 68507 402-466-1613

Don Deepe 81 Automotive 1380 River Road Hebron, NE 68370 402-768-6918

Joel Kershner Kershner’s Auto Korner 220 W. South St. Hasting, NE 68901kershnerautokorner.com402-461-3161 Arlan KuehnKuehn Auto Sales Inc.495 Old Hwy. 20 South Sioux City, NE 68776402-494-2677 www.kuehnauto.com

Brad QuackenbushQ Family Auto 540 S. E St.Broken Bow, NE 68822308-872-2227qfamilyauto.com

Chuck Rogers Chuck Rogers Auto Sales P.O. Box 11 Tekamah, NE 68061 402-374-2400

Jody Smith Jody’s Auto Sales 4 S. Jeffers North Platte, NE 69101 308-534-3729 jodysautosales.com

Executive DirectorJan Merritt 5701 Russell Dr.P.O. Box 29107Lincoln, NE 68529800-659-5453 402-464-2089402-464-8878 (fax)[email protected] www.neiada.com

Assistant Executive Director Gary J. Merritt

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WHAT’SNEW

MAGAZINECONTENTS

ADVERTISERSINDEX

09 Video Marketing12 NEIADA Convention Information14 Compliance Overdrive

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TV2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected] DEALER UPDATES IS PUBLISHED 6 TIMES PER YEAR BY THE NA-TIONAL 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 AD-DITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 6006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF NEBRASKA DEALER UPDATES 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 FEA-TURED. COPYRIGHT © 2011 BY NIADA SERVICES, INC.

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

AutoTrader.com ...................................... Back CoverNebraska Auto Auction .................Inside Front CoverNIADA.TV ..............................................................14SmartAuction .............................. Inside Back CoverUnited Acceptance ................................................5

INSIDE

The Nebraska IADA is compiling a coupon book. Right now we have a coupon from Nebraska Auto Auction for one free buy or sell fee to a new member. Renewing members get $100 off a buy or sell fee.

We are looking for more companies to come forward with coupons. If you have a vendor, transport company, glass company, warranty company, or any individual or company associated with auto dealers that might be interested, please contact them or let us know and we will contact them. Even several coupons at $25 would make a big difference for membership renewal.

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MAKE A DIFFERENCE

Coupons

R A2Z EDUCATION SERIES - AutoZoneEducating the independent dealer to deliver the highest quality service levels to your customers, manage your shop efficiently, train your technicians and maximize profits.niada.tv

R TURBO TIPS – Cars.comProvides Independent Dealers with practicable and actionable tips to help you sell more cars now! niada.tv

R World Automobile Auctioneers Championship Live online coverage of the event begins at 11 am ET on Friday, March 3O, 2012 and is free for all online viewers. visit www.niada.com and click on the “EVENTS” tab or call (303) 807-1108.

No-Cost Member Benefits From American Income Life InsuranceThrough a partnership with American Income Life Insurance Company, new benefits are being provided to all NEIADA members. Please look for a letter in your mailbox that has more information, and don’t forget to return the reply card.

BENEFITS INCLUDED ARE: • $2,000 group accidental death and dismemberment benefit • Health services discount program• Child safe kit(s)

LEARN MORE AT WWW.AILIFE.COM/BENEFITS/SGNAW.An AIL representative will contact members who return the reply card to deliver their no-cost benefits and review other supplemental insurance benefits that may be available. If you have questions, please call Brian McDermott at 308-383-2508.

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News From NIADA Region 3 Vice PresidentMY WIFE JEAN AND I attended South Dakota’s Convention in Deadwood, S.D. It was called Las Vegas in Deadwood Auto Fest. They had a very good turnout of dealers and a lot of vendors.

The following week, Mike Linn, CEO of the National IADA called and had me fly to Florida for that state’s Convention. The purpose of the trip was to install the officers, as Mike had to be elsewhere. Of course, in my spiel I had to talk about the Huskers. It was a great convention.

I know websites have been a problem. I switched to AST, from California. Michael Jackson and his brother own it and NIADA supports them. They have half the state executives’ websites. If you have any questions, please call me or my son Dan.

Looking forward to seeing everyone in Kearney. Hope all our dealers and their families have a nice Christmas.

[email protected]

BY ARLAN KUEHNN

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DMV Holds Title and Registration Seminar THE DEPARTMENT OF MOTOR VEHICLES held a statewide title and registration seminar, hosted by the Nebraska New Car and Truck Dealers Association. Betty Johnson of the Nebraska Department of Motor Vehicles was the instructor.

The four-hour seminar was well worth the time. It touched on all subjects, including reassignments, lost titles, boat titles, trailer titles, inspections and a whole lot more. The class also went over inspections, odometer statements, repossessions, storage-repair liens and assembled vehicle titles.

Some of the topics that attracted interest from the audience were transferring the title through the course of a divorce and transfer of a decedent’s vehicle. Betty went over how the new titles with transfer on death worked and explained the details of it. Betty explained how the transfer of plates from a customer’s old car to a new car can be used. Electronic liens were also discussed, as this is a fairly new process. Another new area discussed involved ATVs, minibikes, UTVs, minitrucks and low-speed vehicles.

Jan Merritt attended the class in Lincoln, and one area that drew a lot of questions at that session was assembled vehicle titles. At the class in Omaha I attended, Betty was constantly hit with the same remark – that the county registration department does things differently than the DMV says it is supposed to.

A couple of important notes:• The DMV plans to have the title laws online by the end of the year in an easy-to-

read format on its website.• You can go to www.clickdmv.ne.gov and check out title inquiry if you want to

know whether there is a lien on a particular vehicle. If you do not have the website bookmarked, I would highly recommend doing so.

For those who did not make this seminar, I hope you plan to attend one in the future, should they hold it again. It was well worth the time.

* Update from Betty Johnson, DMV December 1, 2011. *The Nebraska Department of Motor Vehicles (DMV) has recently published the

Nebraska County Treasurer’s Manual for Titling on their website. This Manual is available for your use at www.dmv.ne.gov, select “Vehicle Titles” from the Vehicle Services Quick Links list and scroll down to last link – County Official’s Titling Manual.

BY GARY MERRITT

EMPLOYEE RIGHTS POSTER TO GO INTO EFFECT JAN. 31 (New Date)

A new federal poster needs to be in place at every employee’s workplace. This new law effects even small businesses. The following are excerpts from the NLRB website for individual dealers to look for online to see if you must comply with this new law. Go to www.nlrb.gov to print this out on your own.

EMPLOYEE RIGHTS NOTICE POSTINGAs of January 31, 2012, most private sector employers are required to post a notice

advising employees of their rights under the National Labor Relations Act. The notice should be posted in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted. Employers also should publish a link to the notice on an internal or external website if other personnel policies or workplace notices are posted there.

For further information about the posting, including a detailed discussion of which employers are covered by the NLRA, and what to do if a substantial share of the workplace speaks a language other than English, please see our Frequently Asked Questions.

You may download and print the notice using the links below. You may also fill out this form or call 202-273-0064 and copies will be mailed free of charge.

PLEASE NOTE: The poster is required to be 11 x 17 inches, in color or in black and white. When printing to full size, be sure to set your printer output to 11 x 17. Or you may print the two 8.5 x 11 pages and tape them together.

The Nebraska IADA has some of these posters printed up in color on 11x17 paper and available at the reasonable cost of $5.95 plus tax for members and $7.95 plus tax for non-members. This includes shipping.

DMVNews

RENEWALS 81 AutomotiveHebron (1991)

Feller’s Auto Plex LLCLincoln (2007)

Bigler MotorsLincoln (1998)

Auto ServicesMt. Home, AR (2001)

Inselman’s Used CarsLincoln (2009)

Car NationOmaha (2010)

Paul Gerber Auto SalesOmaha (1989)

Clarkson Motor Co.Clarkson (2005)

Big Red Auto BookKearney (2005)

Cordel Foreign MotorsOmaha (2004)

Raider Nation Autoplex LLCMead (2010)

Dove AutoGretna (2002)

Eckley Auto BrokersOmaha (2009)

Sander’s Auto SalesLincoln (2007)

Crawford RepairArapahoe (2002)

Falke MotorsWahoo (1994)

CarmaxOmaha (2006)

Big Red Auto BookKerney (2005)

Wheels For YouLincoln (1998)

Winner’s Circle Auto CenterLincoln (2001)

NEW MEMBERSHill Autos1159 No. ChestnutWahoo, NE 68066(402) 443-5513Dana Calta

Mobility Motoring LLC14450 Meadows Blvd. Ste 2Omaha 68138(402) 884-3333Mark Zach

JPK Investment Motors Inc.2244 No. Cotner Blvd.Lincoln, NE 68505(402) 466-7744Joseph Knopp

Nebraska Auto Auction Announces Changes

Nebraska Auto Auction is now a proud ServNet auction. ServNet is a network of 28 top-performing independent auctions strategically located throughout the country. At a recent meeting of ServNet auction owners in Detroit, Eric Bigler, owner of Nebraska Auto Auction, was officially welcomed by ServNet president R. Charles Nichols.

ServNet auctions are powered by Auction Pipeline, an online source that provides dealers a searchable platform to buy and sell inventory from more than 100 auction locations and nearly 50,000 users. Additionally, Pipeline serves as a portal through which dealers can gain access to simulcast offerings.

AuctionACCESS is another product being added at the Nebraska Auto Auction, offering dealers more information and making their auction experience smoother than ever.

AutoIMS is now available at the Nebraska Auto Auction. AutoIMS is an inventory management tool that offers a central platform for auctions and consignors of all types to exchange vehicle data. All of these new services, as well as available simulcast sales, will be in place by January 1. Visit www.nebraskaautoauction.com for run lists, market reports, promotional sales and much more information.

FOR MORE INFORMATION CALL NEBRASKA AUTO AUCTION AT (402) 466-8477.

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EconomicOutlook

The U.S. economy appears to be at an economic crossroad: to the right lies recovery and prosperity and to the left awaits a second recession, a plummeting stock market and rising unemployment. With current economic data that points in the direction of each of these paths, it becomes difficult to predict which outcome is more likely for the United States in the coming months.

In its most recent release, the Bureau of Economic Analysis announced an advance estimate of 2.5 percent for the third quarter U.S. gross domestic product. This follows an even weaker second quarter GDP, which settled at a lowly 1.3 percent. Inflation increased in September to 3.9 percent. This is combined with gold and silver prices that are again on the rise after sliding directly following the United States’ credit downgrade. Together these metrics suggest higher inflation in the U.S.’s future.

Key September/October DataPositive Signs

U.S. productivity remains among the highest in the world, while U.S. non-financial corporations’ cash reserves remain at nearly $2 trillion. The October Conference Board Global Leading Economic Indicators Report shows the U.S. and China increased by 0.2 percent and 0.5 percent, while Europe decreased by 0.6 percent. Though automobile, SUV and light truck sales were down 1.7 percent in September relative to August 2011, they were up 9.9 percent relative to September 2010.

Monthly total light vehicle sales have exceeded one million units for the past seven months. Personal disposable income is up 3.2 percent relative to September 2010 and now sits at $968.3 billion. Construction spending increased further in September and is now 48 percent higher than January 2011.

Negative SignsThe unemployment rate remained unchanged

at 9.1 percent in September as nonfarm payroll employment increased by 103,000 and private sector employment increased by 91,000. Oil prices climbed in October, surpassing $90 a barrel. Housing starts slid for the second straight month. Consumer confidence dropped considerably in October, reaching its lowest level since March 2009.

Current IssuesIn all my years in the retail auto industry and of

all the things I’ve experienced in selling vehicles, I’ve found the most impactful way to generate more sales is to follow up with guests who do not purchase the first time they visit your dealership.

That’s right. Study after study (I do a lot of them) clearly has shown that a typical retail dealership, whether franchised or independent, only effectively manages to achieve a 25 percent “be-back” rate of guests who leave without making a purchase on their first visit. That says 75 percent of the guests are not returning to that dealership to make a purchase.

Yet studies clearly show that guests who do return to gather more information or to re-evaluate their first visit are closed 50 percent of the time versus a 19 percent rate on initial visits. So the real question is, why are these high-percentage closing rate types of potential customers not returning?

The answer is … they were never asked to return. No one ever followed up with them. Over the years, I have been able to track many of these guests with a follow-up call regarding their initial visit. In more than 80 percent of the cases, when I ask, “Has anyone contacted you since your visit to the dealership?” the answer is an emphatic “NO.”

I wanted to put some teeth into my research in an attempt to determine the financial impact should a dealership develop and implement a

consistent (consistency is essential) follow-up procedure for guests who do not make an initial purchase. I selected a dealership averaging 49 retail used vehicle sales per month and turning its used vehicle inventory a minimum of four times per year.

With a clear focus on getting more guests back into the dealership for a “second shot,” the management team agreed to practice a very rigid and dedicated system of having managers follow up with the guests rather than the sales team – just for a controlled benchmark; the sales staff got the deal if the returning customer made a purchase.

Here are the results: Management involvement improved the return rate of guests from 25 percent to 34 percent within seven days, leading to a 31.5 percent increase in the effective closing rate. That led to a 30 percent increase in the used vehicle inventory turn rate. By getting management involved in the follow-up process, monthly used vehicle sales went from 49 retail units to 64 by month’s end, generating an additional $31,105 in gross and reducing operating expenses by approximately $2,795.

All because management got more involved in the follow-up process of guests who visited the dealership but did not make a purchase on that initial visit.

What would happen if your management team and sales team followed up, followed up, followed up and followed up?

Two Very Important Words:

B Y D R . T I M O T H Y N A S H A N D J O E L E S C O T A

Follow up!

Students interested in studying the automotive industry can contact Dr. Timothy Nash at [email protected] for information about Northwood’s programs

Dr. Timothy Nash, an associate professor in Economics, Business and Public Policy, heads specialty programs, including Automotive Aftermarket and Automotive Marketing, for Northwood University.

Joe Lescota is chairman of the Automotive Marketing Department at Northwood University and the instructor for the NIADA Certified Master Dealer program.

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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, I-9s (after termination), receiving sheets.Twenty-five 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 (W-2, W-4, 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 by-laws and charter; property appraisals; articles of incorporation; by-laws; 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’ I-9 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

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IndustryUpdate

Learn More

WORL

D AUTOMOBILE

CHAMPIONSHIP

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. The 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 benefits of the program, the proposal states, “The agencies estimate that fuel savings will far outweigh higher vehicle costs.” The 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 financing a MY 2025 vehicle on a five-year loan are projected to realize a cash flow savings of about $12 per month during the loan period.

The 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 efficiency to comply with the CAFE standards. They will also be able to apply savings from “off-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.

The 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

THE WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP will be webcast live this year for the first time, courtesy of NIADA.TV. The 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 . Coverage begins at 11 a.m. Eastern time on Mar. 30 and is free for all online viewers. Cheer on your hometown favorite auctioneers and ringmen, and catch all 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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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 wall-mount and countertop varieties to vault-like free-standing 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 self-storage 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 DealersINDEPENDENT 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

VIDEO MARKETING HAS THE ABILITY to boost your local search ranking and drive quality traffic, via the social community, back to your website. There is a huge market on video distribution sites like YouTube and Vimeo just waiting to be tapped.

Take a look at some of these quick and simple ways your dealership can get started with video marketing:

Testimonials: These are a great way to promote your dealership – real people from the community expressing a positive opinion about their experiences. Think of it as online word of mouth, which is always the best advertising. A simple 20-40 second video of various interviews placed on your website, blog, social media and video distribution sites will give potential customers another reason to trust your services. People want real-life examples. Testimonials give them that. When the new owner drives away singing your praises, ask if he’d like a picture on his phone to share with his Facebook friends.

How-to videos: Interested consumers

are searching online for videos to help them solve their problems. Think vehicle safety or enhanced performance tips, maybe a short clip on installing child safety and booster seats or the importance of proper tire pressure. Short videos like these are great ways to give your dealership the reputation of wanting to help people without asking for anything in return. Like the old adage says: Give in order to receive.

Interview the dealer: Record a short welcome message from the dealer or general manager. Include local involvement, which can help the community relate to your dealership through a personal connection, not just the business one. Remember to keep it short and sweet to keep your viewers engaged and wanting more.

Incorporating video on your website, utilizing keyword strategy and distributing throughout the web will boost your overall search ranking. Successful dealers evolve with the times – in order to stay ahead of the game it is imperative to maximize your online visibility and reputation by becoming an active part of the social media community. You can start by capitalizing on the value in video SEO.

BY CHRIS MARENTISCHRIS MARENTIS IS THE FOUNDER/CEO OF GENNEXT MEDIA, AN

INTERACTIVE MEDIA AND MARKETING COMPANY, AND CREATOR

OF THE SUREFIRE SOCIAL LEAD GENERATION MARKETING SYSTEM.

FOR MORE INFORMATION, CALL (703) 896-7688, EXT. 111.

MarketingNews

Creating Serious Buzz with Video Marketing

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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 Here-Pay 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 15-plus 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 record-setting 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 glass-half-full 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 dollar-loss standpoint, but from a number-loss 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 charge-off 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 SURVIVE, WHILE THOSE WHO OPERATE IN THE GRAY AREAS WILL FALL BY THE WAYSIDE.

BY BRENT CARMICHAELEXECUTIVE CONFERENCE MODERATOR

NCM ASSOCIATES INC.

[email protected]

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

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

According to the most recent monthly report, there were 854,800 auto finance 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 finance 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. That’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 reflects 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 verification 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.

The 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 finance 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

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THE AUXILIARYWe would like to welcome all ladies to the Nebraska IADA Convention, and especially the auction to fund our

Scholarship program. We also need auction items, and hope you can help us fill our auction tables Saturday night. If you have any questions or would like a state application call Jan or Gary at (800) 659-5453.

National IADA has a scholarship program available to any high school senior, whether their parents are dealers or not. If you have employees or friends with seniors in their families, they can go to NIADA.com and download the application. Your children can apply for national scholarships as well. If you can’t get the application downloaded, call Jan and/or Gary.

Nyla Borgmann, President of the Auxiliary

NEW BENEFITSWe are in the process of obtaining new benefits for our members. One of the recent benefit is a $90.00 gift

coupon from Auto Services. This coupon is valid off a 12 month on longer service agreement. For more information contact ASC, Mt. Home, Ark., (800) 442-7116. We have had commitments from several auto auctions. We hope to have these worked out by the first of the

year.Don’t forget to use your membership card at the Manheim Omaha auto auction. Every week you get one

$10.00 off a buy or sell fee. Just present your membership card with your auction card at the counter when you settle up.

Remember if you join you receive a coupon from Nebraska Auto Auction for a free buy or sell fee. When renewing you receive a $100 off a buy or sell fee.

In another section of this Newsletter you see another new benefit, for a death benefit insurance. If any dealers have towing companies, auto glass dealers or service companies interested in providing a $25

or $50 coupon, please let us know. We will print the coupons for the company.

SEMINARS:• REPORT FROM DMV • NATIONAL IADA UPDATE

Arlan Kuehn, Region III Vice President, National IADA

• REPORT FROM THE LICENSING BOARD

• OPEN FORUM DISCUSSION All Exhibitors, Sponsors and Speakers invited to participate.

• LEGISLATIVE UPDATE Doug Borgmann, Arlan Kuehn,

Gary Merritt.

AUXILIARY AUCTION TO BENEFIT SCHOLARSHIP PROGRAMEXHIBIT HALL HOSPITALITY ROOM

WE ARE IN THE PROCESS OF LINING UP SPEAKERS AND VENDORS FOR THE CONVENTION. WE WILL HAVE A COMPLETE LIST CLOSER TO THE CONVENTION.

ALSO, IF ANYONE KNOWS OF A COMPANY THAT WOULD LIKE TO DONATE TO THE AUXILIARY AUCTION AND PRIZES FOR CASINO NIGHT, PLEASE CONTACT US.

Back by popular demand is Casino Night on Friday night. There will be an Auxiliary Auction to help fund the Scholarship Program on Saturday night. As in previous years we will have dinner Friday night, breakfast buffet Saturday morning, lunch Saturday and the Awards Banquet Saturday evening. The business meeting and board of directors meeting will be Sunday. Be sure and make your room reservations early – the cutoff date is 30 days prior to the meeting.

convention35thANNUAL CONVENTION

NEBRASKA IADA • FEBRUARY 17-19, 2012 • HOLIDAY INN • KEARNEY, NE 68847

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INFORMATION… EDUCATION…2012

NEBRASKA INDEPENDENT AUTO DEALERS 35TH ANNUAL CONVENTION

FEBRUARY 17-19, 2012 Holiday Inn, 110 Second Avenue, Kearney, NE 68847

ENCLOSED PLEASE FIND CHECK IN THE AMOUNT OF: $___________________ Please check here if you have a disability and may require an accommodation. You will be contacted to discuss your special needs. ________

_______________________________________ ______________________________________ NAME NAME

_______________________________________ ______________________________________ NAME NAME

_______________________________________ ______________________________________ NAME NAME

_______________________________________________________________________________________ DEALERSHIP NAME

_______________________________________________________________________________________ ADDRESS, CITY, ZIP

_____________________________________________________ PHONE

(Please include wife and children’s names for badges) Have you attended a convention before?_______________

REGISTRATION: $135.00 PER COUPLE EXHIBITORS: $75.00 PER TABLE PLUS $75.00 PER PERSON $75.00 PER PERSON

KIDS (15 AND YOUNGER): $25.00 # Attending Friday night banquet _____________ #Attending Saturday night banquet___________

ROOM RATES AT THE HOLIDAY INN $79.95 PER NIGHT, 1 TO 4 PEOPLE IN A ROOM (Please reserve your room early as they release our block of rooms 4 weeks prior to convention)

WHEN REGISTERING BE SURE TO TELL THE HOLIDAY INN YOU ARE A PART OF NEBRASKA IADA TO INSURE PROPER ROOM RATES.

HOLIDAY INN, 110 Second Ave., Kearney, NE 68847 (308) 237-5971 Fax (308) 326-7549

MAKE CHECKS FOR REGISTRATION & EXHIBITORS FEE PAYABLE TO: NEBRASKA IADA P.O. BOX 29107

ANY QUESTIONS CALL Jan or Gary at (800) 659-5453 LINCOLN, NE 68529 (402) 464-2089 Fax (402) 464-8878

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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, trade-in 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 cross-references 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 cross-reference 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, pre-closing 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 agreed-on 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

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Edmunds.com Names Best Bets on Used Autos for 2011

Edmunds.com, the premier online resource for automotive information, released its 15 best used vehicle bets for 2011 in June. A total of 11 makes are represented on the list, with four makes (Ford, Honda, Hyundai and Toyota) each contributing two models.

BY SEGMENT, THE WINNERS ARE: •�Compact�Sedan:�2004-2009�Hyundai�Elantra•Midsize�Sedan:�2004-2009�Nissan�Altima•Large�Sedan:�2006-2009�Hyundai�Azera•Coupe:�2004-2009�BMW�3�Series•Convertible:�2004-2009�Mazda�Miata•Wagon:�2004-2009�Pontiac�Vibe•Compact�SUV/Crossover:�2004-2009�Honda�CR-V•Midsize�SUV/Crossover:�2004-2009�Ford�Explorer�•Large�SUV/Crossover:�2004-2009�Chevrolet�Tahoe�•Minivan/Van:�2004-2009�Honda�Odyssey•Compact�Truck:�2004-2009�Toyota�Tacoma�•Large�Truck:�2004-2009�Ford�F-150�•Luxury:�2004-2009�Infiniti�G35/G37�•Hybrid:�2004-2009�Toyota�Prius•Sport�Compact:�2004-2009�Subaru�Impreza�WRX

A team of Edmunds.com editors assembled the list, which emphasizes the most important criteria to consider when researching and deciding on a used vehicle:�reliability,�safety,�value�and�availability.�Eligibility was limited to vehicles ranging in age from 2 to 7 years.

For more details on Edmunds.com’s selection process and for a brief description of all the cars on this year’s list, visit 2011 Used Car Best Bets at www.edmunds.com/car-reviews/best-used-cars.html.

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