APRIL 2016 MidAtlantic Dealer News

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MidAtlantic

DealerNews

APRIL 2016

AFFILIATED WITH NIADA | PUBLISHED BY PA-MD-DE IADA

Pennsylvania | Maryland| Delaware

www.piada.org | www.newjerseyiada.org | www.newyorkiada.org | www.mdiada.org | www.deiada.org

ROBERT HOLLENSHEAD ON DIMINISHED

VALUE CALCULATOR

NHTSA ON ELECTRONIC

NOTIFICATION OF

SAFETY RECALLS

UPDATE ON

PENNDOT’S 5 YEAR

AGENT CONTRACT

I. A. D. A.

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PIADA

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Harrisburg, PA 17102

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MidAtlantic

DealerNews

Affiliated with National Independent Auto Dealers Association

DEPARTMENTS & ARTICLES

Presidents’ Message to MidAtlantic Dealers By John DeFilippo ..........6

Executive Directors’ Message By Paula Frendel, Reg Evans .............8

Dealer Best Practices in Response to Emissions Fraud Lawsuits

By Anthony Bush, Esq. and Grace S. Power, Esq. ..................10

NIADA With State IADA's Input Provides Comments to NHTSA on

Alternative Methods of Safety Recall Notification By Reg Evans .......12

Diminished Value Calculator...Backed With a Check...Holy Schmozoly

By Robert Hollenshead ....................................14

New 5 Year Agent Contract Required by PennDOT By Arie Garcia ........16

Political Campaigns Impact Legislation and Policy By Bob Keaton .......20

PennDOT Announcement of Elimination of Registration Stickers .........20

America's Auto Auction Harrisburg Hosted First Live Agent Seminar

of 2016 By Reg Evans .....................................21

Your Most Important Collection Tool By Al Mosher ...................22

What Edmunds Says About Near Record CPO Vehicle Sales ............26

Legal Corner By Tom Hudson, Esq. and Nicole Munro, Esq. ............28

Kontos Kommentary By Tom Kontos, Adesa Auctions ................30

PIADA, NJIADA/NYIADA, MIADA/DIADA

PROGRAMS, OFFERS & EVENTS

PIADA ANNUAL GOLD AND BRONZE SPONSORS ................. 6, 13

5th Annual MARIADA Dates/Locations Set .................... 6, 8, 18

Announcing Keynote Speaker, BIll Clement, for MARIADA 2016 .........18

PIADA Issuing Agent Training Courses ...........................23

AUCTION DIRECTORY - EXPANDED FOR OUR STATES ...............24

Pennsylvania Forms Dealers Can Order ..........................25

Maryland Forms Dealers Can Order .............................25

IADAs Membership Information ................................25

ADVERTISERS

✷ ABC Lancaster ..............31

✷ Adesa PA/Adesa Pittsburgh ......7

✷ America’s Auto Auction Harrisburg. 2

AutoTrader ....................6

Auto Use ....................21

✷ Auto Zone ...................6

✷ Bel Air Auto Auction ..........23

✷ Central Pennsylvania Auto Auction. 32

✷ Corry ADE ....................9

✷ Counselor Library ............13

Dealer Goodies ..............27

4 | APRIL 2016 MIDATLANTIC DEALER NEWS

APRIL 2016

✷ Greater Erie Auto Auction ......13

✷ GWC Warranty. ...............3

✷ Kramer Insurance Center .......23

Manheim New York. . . . . . . . . . . . .15

✷ Manheim Pennsylvania. . . . . . . . . 17

MyDealerOnline .................6

NextGear Capital ................6

✷ North East PA Auto Auction .....19

✷ ProGuard Warranty Inc. .......5,6

✷ Winchester Auto Auction .........9

✷ ADVERTISER ALSO PARTICIPATING IN THE 2016 DISCOUNT BOOK FOR PIADA-MDIADA-DEIADA FOR ALL FIVE MIDATLANTIC STATES.

EXPANDED DISTRIBUTION OF THIS RENAMED MAGAZINE (FORMERLY PA DEALER NEWS) NOW INCLUDES DEALERS IN THE FIVE STATES OF

PENNSYLVANIA, NEW JERSEY, NEW YORK, MARYLAND, DELAWARE: (1) VIA EMAIL TO ALL DEALER MEMBERS AND TO ALL NON-MEMBERS THAT

PROVIDE US WITH THEIR EMAIL ADDRESSES: (2) PAPER COPIES ARE MAILED TO PIADA MEMBERS IN PA AND TO MEMBERS OF NJIADA, NYIADA,

MIADA/DIADA: (3) PAPER COPIES FOR MEMBERS AND NON-MEMBERS IN ALL FIVE STATES MAY BE OBTAINED FOR FREE AT PARTICIPATING

AUCTIONS ON AUCTION SALE DAY. MIDATLANTIC DEALER NEWS SENDS FREE COPIES FOR DISTRIBUTION TO DEALERS AT AN ANTICIPATED

APPROXIMATELY: 19 WHOLESALE VEHICLE AUCTIONS IN PENNSYLVANIA, 11 IN NEW YORK, 2 IN NEW JERSEY, 2 IN MARYLAND.

WOULD YOU LIKE TO RECEIVE A DIGITAL VERSION OF THE MIDATLANTIC DEALER

NEWS MAGAZINE EARLY EACH MONTH? Email Shannon at Shannon@piada.org.

Cover photo credit: Taina Sohlman / Shutterstock.com

PA-MD-DE IADA'S 2015-2016

OFFICERS AND DIRECTORS

John DeFilippo, President

DeFilippo Bros. Motorcars (PA)...........610.532.8771

Tad Swift, Chairman

Corry Auto Dealers Exchange (PA)......814.664.7721

Tom Brandis, Treasurer

Advantage Auto Sales & Credit (PA)....215.805.2034

Clint Weaver, Secretary

America's Auto Auction Harrisburg (PA)..717.697.2222

Michael Brill, Vice President

B & B Automotive (PA).......................215.781.1818

Tom Hodges, Vice President

Tom Hodges Auto Sales (MD).............301.373.2277

Michael Mansour, Vice President

Car Connection, Inc. (PA)...................724.658.1212

Beth Melamed, Vice President

Ticket to Ride Auto (PA).....................717.393.9133

Fran Morelli, Vice President

Fran Morelli Sales & Service (PA).......814.265.1330

Lisa Cohowicz, Director

North East Pennsylvania Auto Auction (PA)..570.207.2277

James Cuce, Director

Manheim Philadelphia Auto Auction (PA)..215.962.6742

Jeff Dreier, Director

Dreier Auto Sales (PA).......................570.675.5696

Joe Eikenberg, Jr., Director

Aero Motors, Inc. (MD)......................410.686.3444

Gus Kurtz, Director

Sports and Imports, Inc. (MD)............410.360.8600

Dan Limongelli, Director

Jo-Dan Motors (PA)............................570.829.4043

Kevin Luring, Director

Garden Spot Auto Auction (PA)...........717.738.7900

Noah Melamed, Director

Ticket to Ride Auto (PA).....................717.393.9113

Kevin Novitsky, Director

Village Auto Sales (PA)......................570.254.6463

Chris Smiley, Director

Mountville Motor Sales (PA)...............717.681.9610

George Smouse, Director

Smouse Trucks & Vans (PA)...............724.887.7777

Steve Worley, Director

Worley Motors (PA)............................717.732.2051

Jay Zimmerman, Director

Zimmerman’s Auto Sales (PA)............717.766.7656

STAFF

Reg Evans, Executive Director

reg@piada.org............................. 717.238.9002 x28

Arie Garcia, Director of Operations

arie@piada.org.............................717.238.9002 x13

Shannon Becker, Membership Director

shannon@piada.org......................717.238.9002 x18

Ping Goslawski, Finance Department

ping@piada.org............................717.238.9002 x12

Nicole Autry, Dealer Development

nicole@piada.org......................... 717.238.9002 x26

Gigi Kode, Messenger/Title Call Center..717.635.2595

Peter Salinas, Special Contributing Writer

Jerry Trone, Media Photographer

To keep the MidAtlantic Dealer News on schedule, certain deadlines

must be observed. All information is due at the Pennsylvania-

Maryland-Delaware Independent Automobile Dealers Association

(“IADA”) office in Harrisburg thirty days prior to the publication date

of each issue.

The MidAtlantic Dealer News is a publication of the IADA, 1501

North Front Street, Harrisburg, PA 17102, in cooperation with our

partners the NJIADA and NYIADA. Advertising rates available on

request. If you have any questions please call the IADA office at

717.238.9002.

IADA was established in 1955, and chartered in 1959 under

the Non-Profit Corporation Laws of the Commonwealth of

Pennsylvania as PIADA and merged with Maryland and Delaware

trade association in 2015.

The statements and opinions expressed herein are those of the

individual authors and do not necessarily represent the views of

the MidAtlantic Dealer News, IADA, NJIADA, or NYIADA. Likewise,

the appearance of advertisers, or their identification as members

of IADA, NJIADA, or NYIADA, does not constitute an endorsement of

the products or services featured.

Editorial and advertising requests should be directed to the

Editor: MidAtlantic Dealer News, IADA, 1501 North Front

Street, Harrisburg, PA 17102. Telephone 717.238.9002, FAX

717.238.3870 or e-mailed to Shannon@piada.org.

Logos are respective trademarks of the IADA, NJIADA, NYIADA.

Copyright © 2015-2016 by IADA. All Rights Reserved.

PUBLISHING SERVICES PROVIDED BY

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192 Hempt Road, Mechanicsburg, PA

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FROM THE PRESIDENT TO MIDATLANTIC DEALERS

JOHN DEFILIPPO

DeFilippo Bros. Motorcars

2240 East Lincoln Hwy.

Coatesville, PA 19320

610.532.8771

www.ujobucredit.com

Our Board of Directors of PIADA-

MDIADA-DEIADA met in March

2016 in Harrisburg. We meet

quarterly and at the MARIADA

Annual Convention where we hold

our annual President’s meeting

(named before my time) and hold a

Members vote to elect 1/3 of our

Directors for a 3 year term.

We have 22 Board members. They

drive in from all over the place:

western PA, southern Maryland,

Scranton - Wilkes-Barre, Erie, New

Castle, Mount Pleasant, Lancaster, Columbia, Baltimore and

Hollywood and Pasadena Maryland, Quakertown, Philadelphia,

Telford, Croydon,

PIADA ANNUAL

GOLD SPONSOR

PIADA ANNUAL

BRONZE SPONSORS

WHAT WE ARE DOING FOR DEALERS LATELY

By John DeFilippo

Brockway, Avoca,

Shavertown, Plains,

Scott, Coatesville,

Mechanicsburg, Enola,

Ephrata, Corry, even

Bunker Hill West Virginia.

And soon enough, a

Director from Delaware

too. You get the idea.

It is a full day event

and we try to cover as

much industry advocacy

and benefits ground as

possible, including with

our lobbyist Bob Keaton.

The Directors are

dedicated to you, our

Members and our

Industry. We invited

some Special Guests

this time to talk about

legislation in our States

and to brainstorm about

services, programs,

benefits we can provide

to our Members. Our Special Guests were Sal Enea,

President of the New Jersey Independent Automobile Dealers

Association, and Paula Frendel, Executive Director of both

the New Jersey and the New York Independent Automobile

Dealers Associations. What a great discussion we had! More

perspectives and ideas, without it being too many people. You

should contact our Staff office if you are a Member and want

to see what our meetings are all about. Between meetings,

we have monthly Executive Committee meetings to keep

things rolling.

Teamwork has been great for us. Together our five States

created the MidAtlantic Independent Automobile Dealer

Associations (MARIADA) Convention and our fifth one will

be held back at the excellent venue of Loews Philadelphia

Hotel on November 5-6. We are switching it up this year with

keynote speaker Bill Clement, National Hockey League All-

Star and 2-time Stanley Cup champion, formerly with the

Philadelphia Flyers and who then became an NHL broadcaster

and Olympics announcer and writer on leadership. Check out

Bill on page 18.

Pursuant to Teamwork, we provided 11 webinars this

month (March Madness) and one live Agent education

training class. Members, please read your emails

announcing and inviting you to the April 2016 webinars

(including one introductory webinar by sales training

expert George Dans) and the live Agent training classes

taught by the PIADA chapter’s Arie Garcia (also see page

21). Suggest webinar topics and we will try to make them

happen.

By the way, you may see a bit of a change in this page in

some of the upcoming months. We want to provide you, our

readers, with perspectives from all of our Board members

who have plenty of interesting things to say to you regarding

our industry.

Until next month, sell all you can!

John

6 | APRIL 2016 MIDATLANTIC DEALER NEWS


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EXECUTIVE DIRECTORS' MESSAGE

This month, let’s check on

some interesting legislative and

regulatory developments in the

MidAtlantic States.

SUNDAY SALES BILL IN

REG EVANS PENNSYLVANIA

Executive Director There is a bill in the State

PIADA, MDIADA, DEIADA Senate that would make Sunday

www.piada.org, sales of vehicles permissible,

www.mdiada.org, not mandatory, for dealers in

www.deiada.org

Pennsylvania. Members, you are

invited to let us know your views about such a proposed bill.

FIGHTING FOR FEES RELIEF

We continue to seek relief for dealers from the increased

Pennsylvania title and lien fees. We tried one avenue and

are now working on another through and with assistance from

our hired lobbyist. We will update members separately on

this issue. You deserve a break from these fee increases.

PERPETUAL IMPOUNDMENTS IN PENNSYLVANIA

Vehicles impounded, notices not being sent out to lienholders

or late sending, racking up high storage fees, not being

allowed to view the collateral at the impound to decide whether

to pay it and take it or to let it go. We are concerned about

this issue in Pennsylvania.

MARYLAND MVA BULLETIN ON TRADE-IN VALUES

The Maryland MVA is issuing a Bulletin stating its concern that

vehicle sale transactions are being submitted or processed by

Maryland dealerships involving trade-in vehicles that exceed

the trade-in value indicated in a national publication of used

care values and documentation is not submitted to justify

the exceeding value.

The MVA advises that in accordance with Maryland regulations,

if the trade-in allowance is more than the trade-in value in

a national publication of used car values adopted for use by

the MVA, then the dealer must provide documentation that

satisfies the MVA that the higher trade-in value is justified.

MARYLAND TAXES

Maryland State House Bill 1152 would move Maryland from

a three factor to a single sales factor state (SSF) for tax

purposes. This would alter the formula used to apportion

income to the State for corporations that work within

and outside of Maryland by deemphasizing property and

FROM SUNDAY SALES

TO SAFETY RECALLS

By Paula Frendel and Reg Evans

payroll factors in tax assessment.

Reportedly, 15 States including

Pennsylvania, New Jersey, and New

York already have adopted this

SSF tax approach. SSF is being

promoted as helping Maryland

to attract and retain businesses,

jobs, and capital investment. This

may positively affect Maryland

dealers that do business across

the State borderline.

PAULA FRENDEL

Executive Director

NYIADA and NJIADA

www.newyorkiada.org

www.newjerseyiada.org

DELAWARE

Delaware House Bill 233 was signed into law to delay

implementation from January 30, 2016 to April 1, 2016

regarding the new procedures for failure to resolve motor

vehicle charges and suspension, nonrenewal, or suspension

of driving privileges.

NEW JERSEY GPS BILL

The New Jersey bill to impose interest rate limits on a dealer

that places a GPS on vehicle collateral for an installment loan

remains under consideration in the State Assembly. This bill

would hurt consumers by making repossession the primary

means of dealing with late payments or nonpayment on a

vehicle installment loan.

PROPOSED SAFETY RECALL REGULATIONS IN NEW YORK CITY

The New York City Department of Consumer Affairs vehicle

safety recall issue has been postponed AGAIN, this time until

April 22, 2016. NYIADA and its fellow State IADAs are hoping

that NYC DCA will be following the Federal regulations instead

of imposing local NYC DCA safety recall requirements on our

already heavily regulated industry.

THANK YOU FOR YOUR CALLS TO LEGISLATORS

Thank you again to our Members for the grass roots telephone

calls you made to notify the Pennsylvania General Assembly

that the proposal to tax trade-in vehicles was a bad idea that

would hurt our dealership businesses.

SUPPORT YOUR ASSOCIATION AND STATE POLITICAL

ACTION COMMITTEES

We need your support. Members, please contribute to your

PAC. Nonmembers, please join your State Association. We

cannot defend and advocate for you effectively without your

support.

Have a Great Sales Month!

8 | APRIL 2016 MIDATLANTIC DEALER NEWS


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DEALER BEST PRACTICES IN RESPONSE

TO EMISSIONS FRAUD LAWSUITS FILED BY

NJ AG AND OTHERS VS. VOLKSWAGEN -

IMPLICATIONS FOR THE SALE OF

ANY USED VEHICLE

By Anthony Bush, Esq. and Grace S. Power, Esq. of Eckert Seamans Cherin & Mellott, LLC

Anthony Bush is a Member

in Eckert Seamans’

Princeton Office with over

two decades of experience

with automotive issues. He

counsels a wide spectrum

of clients including

automobile dealerships,

operators of wholesale

motor vehicle auctions,

auto parts distributors,

finance companies, and

auto body repair facilities.

Tony and Eckert Seamans

have expertise representing

dealers in consumer and

corporate litigation, land

use matters, business

counseling, employment

matters, franchise

disputes, before the New

Jersey Motor Vehicle

Commission and New

Jersey Department of Law

and Public Safety, Division

of Consumer Affairs, and in

legislative and regulatory

issues affecting the

automotive industry.

Grace Strom Power is an

Associate in the Princeton

Office and has over 10

years of government

affairs experience in both

the public and private

sectors, advising and

representing clients before

the New Jersey State

Legislature, Office of the

Governor, state and local

agencies, commissions and

regulatory authorities.

On February 5, 2016, New Jersey Acting Attorney General John J. Hoffman filed suit against

VW and its subsidiaries Audi and Porsche for carrying out alleged fraud against consumers by

using software in millions of diesel vehicles to circumvent federal emission tests allowing it to

increase sales by improperly touting environmentally friendly cars. The suit seeks maximum

penalties against Volkswagen for alleged violations of the New Jersey Air Pollution Control Act and

Consumer Fraud Act, which allows for treble damages, attorney’s fees and direct restitution to

consumers that have been materially

harmed by the company’s misconduct.

The suit alleges approximately 17,400

Volkswagen vehicles equipped with

the defective equipment are registered

in this state. New Jersey is the second

state in the country following New

Mexico, in suing Volkswagen over the

same alleged emissions fraud.

Volkswagen submitted recall

plans that were initially rejected

by the federal government as not

adequately addressing overall impacts

on vehicle performance emissions

and safety. Discussions are ongoing

between Volkswagen and the federal

government.

Photo credit: josefkubes / Shutterstock.com

DEALERS OBLIGATIONS

In the midst of these well-publicized emissions testing problems and lawsuits filed by different

states, countries, and consumers against the manufacturers, dealers increasingly have obligations

when selling any used motor vehicle with an open recall and/or when a recall has not yet been

issued but is widely expected. The following New Jersey and federal proposed and existing laws

and regulations should be considered.

• Federal law prohibits the sale of new vehicles with open recalls but neither federal nor New

Jersey law specifically bar the sale of used vehicles with open recalls.

• New Jersey’s Consumer Fraud Act and the Federal Trade Commission Act indirectly address

the sale of used vehicles with open recalls.

• According to some estimates, one in six vehicles has an open recall and only about 70% of

vehicle recalls are ever closed or fixed.

• Not all recalls involve safety concerns. Some recalls are non-safety related. For example,

non-functioning air conditioners and radios, ordinary wear of equipment that has to be

inspected, maintained, and replaced periodically. Such equipment includes shock absorbers,

batteries, brake pads and shoes, and exhaust systems.

• In some cases, especially for non-safety related recalls, the parts may be back ordered or

hard to obtain for weeks or months. A blanket rule that would bar sales of any vehicles with

an open recall would negatively, and perhaps unfairly, impact a dealer’s costs and inventory,

yet may not make the public any safer in many instances.

• The Federal Trade Commission has brought recent enforcement actions against an American

Manufacturer and two dealer groups concerning open recalls. The Manufacturer and the

10 | APRIL 2016 MIDATLANTIC DEALER NEWS


dealer groups advertised that many of the vehicles had

undergone a comprehensive inspection process, often as

part of a certified pre-owned program. The FTC alleged

in separate complaints that the manufacturer and the

dealer groups violated the Federal Trade Commission Act

by touting those inspection processes but not informing

consumers about the existence of unrepaired safety

recalls. The companies denied wrongdoing and were not

assessed fines but are now prohibited from claiming their

vehicles have under gone a rigorous inspection unless

they are free of unrepaired safety recalls. If a safety

recall is not repaired, those companies against whom

the actions were brought must disclose the existence

of any safety related recalls in close proximately to any

statement about the inspection process.

• A Recall bill was reintroduced in the New Jersey

State Legislature in January 2016 for the second

consecutive legislative session that would require

dealerships to check the National Highway Traffic

Safety Administration’s (“NHTSA”) website and inform

a potential buyer of any outstanding recalls. Under the

bill, dealers would not be liable for any errors contained

on the NHTSA website. The bill makes clear that: (1)

there is a “irrebutable presumption” that the dealer

had no knowledge of a recall if the information was not

on the NHTSA website at the time of the sale; and (2)

dealers would not be required to fix open recalls prior

to selling a vehicle (which often would not be practical).

The bill would not apply to wholesale transactions or

sales between owners and operators of junk businesses

or motor vehicle junkyards or any person involved in

dismantling, destroying or recycling motor vehicles.

Failure to disclose an outstanding recall under the bill

would constitute a violation of the New Jersey Consumer

Fraud Act subjecting dealers to actions brought by the

Attorney General’s office for fines, attorney’s fees and

costs of collection as well as cease and desist orders or

civil suits by retail consumers for treble damages (three

times compensatory damages) and attorney’s fees.

• New Jersey’s existing Consumer Fraud Act requires

dealers to refrain from affirmative misstatements or

omissions regardless of intent on selling a motor vehicle.

For example, not mentioning that the vehicle is one of

the effected diesel models involved in the Volkswagen

emission scandal or stating a vehicle’s airbag doesn’t

need to be replaced could create legal exposure if it were

found to be untrue.

• The New Jersey advertising regulations that correspond

to the Consumer Fraud Act also require dealers to

disclose substantial body or repair work performed on

a motor vehicle that they knew or should have known

about that cost $1,000.00. Depending upon the nature

of the recall, the cost could exceed the $1,000.00 limit.

Failure to make necessary disclosures under the Act

could subject dealers to compensatory damages, treble

damages and attorney’s fees.

BEST PRACTICES

Dealers should disclose, for example, if a used Volkswagen

diesel vehicle that they are offering for sale is one of the

impacted models even if a recall has not yet been issued

for the vehicle. In terms of existing recalls for other vehicles

that are not the subject of the NJ Attorney General’s suit,

dealers should make full disclosure about known recalls

especially if representing that the vehicle has undergone

a comprehensive inspection process prior to sale. Even

if there is no representation that the vehicle underwent a

comprehensive inspection, best practices are to make the

disclosures. The transparency is what consumers expect

and it can potentially mitigate liability for dealers. From a

practical standpoint, dealers should simply check the NHSTA

website. They should inform customers if a recall exists, if

it is being fixed or not, and have their customers sign a copy

of a printout from the website acknowledging that they have

been provided the information. 3

Photo credit: villorejo / Shutterstock.com

MIDATLANTIC DEALER NEWS APRIL 2016 | 11


WITH STATE IADAS’ INPUT PROVIDES

COMMENTS TO NHTSA ON ALTERNATIVE METHODS

OF SAFETY RECALL NOTIFICATION

By Reg Evans

With input from PIADA-MDIADA-DEIADA and other State

Independent Automobile Dealer Associations (“IADAs”),

the National Independent Automobile Dealers Association

(“NIADA”) provided comments to the National Highway

Transportation Safety Administration (“NHTSA”) on alternative

means of safety recall notification besides or in addition to the

presently used first class mail notification. The suggestions

from the NIADA to NHTSA involve various means of electronic

notification to owners of vehicles that have a discovered safety

defect or otherwise do not comply with an applicable motor

vehicle safety standard.

The NIADA letter dated March 10, 2016 to NHTSA included

the following statements:

“With the ever-increasing number of vehicles subject to

open recall, NIADA fully supports sound public policy that

will lead to a 100% recall completion rate. Integral to that

discussion is ensuring owners of vehicles are notified

when their vehicles are subject to a recall. Although

the traditional method of notification via first class mail

has had some practical usefulness in the past, and will

continue to moving forward, new technologies exist that

should be considered for providing this notice.

However, notification need not be a “one-sized fits all

approach.” Alternative means of notification that utilizes

available technology such as email, texting, and other

Internet and cellular media should be fully explored.

NIADA also encourages NHTSA to explore the use of a

vehicle’s telematics systems, such as On-Star and Blue

Link, where installed, to notify owners of recalls. NIADA

also encourages NHTSA, state motor vehicle registrars,

and manufacturers to explore ways to notify owners at the

time of vehicle registration of an open recall.

NIADA believes that NHTSA’s development of the VIN

specific recall search tool on safercar.gov has been useful

in improving recall completion rates. Consumers, dealers,

auctions, service centers, and others can use the tool to

search the recall status of a particular vehicle and have it

fixed assuming parts are available. While this search tool

is useful, it is not efficient for those in the wholesale and

retail automobile markets in need of and wanting to check

multiple VINs at any given time. NHTSA’s development

of an engine that would allow these entities to search

a batch of VINs in a single instance would provide more

timely information in a much more cost effective manner

assisting in the recall repair rates.”

PIADA-MDIADA-DEIADA, NJIADA, and NYIADA continue to

advocate for our dealership and vehicle auction industry at

the federal and State legislative levels to avoid duplicative and

excessive regulatory burden on our member dealerships. 3

12 | APRIL 2016 MIDATLANTIC DEALER NEWS


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MIDATLANTIC DEALER NEWS APRIL 2016 | 13


DIMINISHED VALUE CALCULATOR...

BACKED WITH A CHECK...

HOLY SCHMOZOLY

By Robert Hollenshead

Robert Hollenshead

is a wholesale automobile

dealer and remarketing

veteran of more than four

decades and the

Founder/CEO of

R. Hollenshead Auto Sales

Inc., Accutrade-Trade LLC

(Canadian guaranteed

pricing and lead

generation), MADE

Logistics LLC, DimValCal

(guaranteed diminished

value calculation

algorithm), North American

Diminished Value

Association LLC, and

Headstart VMS LLC. R.

Hollenshead Auto Sales,

Inc., Palm Beach, FL, and

Manheim, PA, is the

largest independent

wholesale vehicle

dealership in the World.

R. Hollenshead companies

are dedicated to

developing solutions for

the North American

wholesale automobile

industry.

Contact Information:

www.rhollenshead

autosales.com

Dealer Inquiries:

Phone: 888.223.1172

Fax: 888.593.6089

Email: Sales@rhasales.com

www.buybooktech.com

Phone: 866.55-BUYIT

(555.8948)

Fax: 888.824.4385

Email:

Info@BuyBookTech.com

I’ve been screaming about diminished value for decades. A hit on a history report, correct or

not, creates an undeniable diminution in value that only a newly landed Martian would be silly

enough to deny. Twenty five years ago when vehicle history reports first started surfacing,

the average price of a new car was $30,000 or less. Today it’s double. Whoever thought an

Escalade would be sneaking up on $100,000? A small insurance claim intrinsically creates

a desirability issue that crushes the value. The proverbial “shopping cart” accident can make

that Escalade’s ACV plummet. Who will bid and why they won’t changes the “desirability index”

dramatically and therefore the value simply is not the same...or close.

Over the decades (holy smokes time flies) we built the tool that universally solves the issue

of quantifying the valuation, the dollar amount, on the VIN specific unit. Thank any God we

did. Because now that the buzz on the diminished value topic is intensifying we are ready

willing and able to bring the Diminished Value Calculator (it will be using dimvalcal.com as

the URL), DVC as the acronym, to the general market.

Our goal is to make collecting the diminished value an open and shut process. The impact

on the specific 17 digit VIN is one that falls outside a layman’s capacity. The DimValCal,

our diminished value calculator, creates a guaranteed value, a wreck report, to be used in

getting your wreck check. Individuals, dealers, dealer loaners that always end up with a hit

on FAX, lease companies, captives, rental car companies all have a clear path to getting

paid Real time. The DVC takes all the specific VIN explosion details that are obvious like

any recognized value guide might, but it also takes into consideration thousands of details

and market driven nuance that aren’t so obvious, namely, the multitude of things that we’ve

experienced qualifying, quantifying, pricing, actually buying, and actually selling, millions of

vehicles over the decades.

The DVC patent pending algorithm fundamentally changes the accident victim’s view of the

heretofore dilemma… how they go about collecting what the law says they have coming to

them but nobody has figured out, the diminution in value they experienced when their vehicle

had an accident in a clear, empirical, accessible to anyone, market driven guarantee.

In addition to being 100% transparent, DVC enables the user to transact. The fact that a

pre and post-incident guarantee to purchase the specific unit in question sets it apart from

the “opine” of any other entity/system/book/company. While capturing the granular detail

necessary to make a purchase offer, DVC inherently creates a desirability index that considers

how a unit is viewed by traders in the liquid wholesale market from coast to coast in the US

and Canada. How an accident impacts a white 2014 Mercedes S550 compared to a blue

one with the exact same characteristics is dramatic in reality. You ask how or why? I say a

lot and because.

The because is in the market driven nuance which makes up the science baked into the

algorithm. Separate from geographic variance, supply, exportability, depth of the hit, location

of the hit, contiguous panel effected in the hit, miles, color, smell, DVC includes a very unique

way it looks at the depth of the predictive buyer base on the specific unit. The DVC process

also captures granular detail that produces a “pedigree “of the VIN and the case. All vehicle

valuation and case documentation are housed on Headstart DVMS, a robust cloud based

workflow brain, a management process, where permanent record of each case can be accessed

by subscribing lawyers, dealers or individuals. Headstart DVMS stands for Diminished Value

Management System.

Again, our goal is to make collecting the diminished value an open and shut process. The

impact on the specific 17 digit VIN is one that falls outside a layman’s capacity. The DimValCal,

our diminished value calculator, creates a guaranteed value, a wreck report, to be used in

getting your wreck check. Individuals, dealers, dealer loaners that always end up with a hit on

FAX, lease companies, captives, rental car companies all have a clear path to getting paid. 3

14 | APRIL 2016 MIDATLANTIC DEALER NEWS


SHORT DRIVE

GREAT DEALS

Manheim New York is one of the most easily accessible auctions around.

MANHEIM

NEW YORK

On the crossroads of the Northeast in Newburgh, Manheim

New York is easily accessible by plane, train and automobile.







2000 Dealer Drive

Newburgh,NY 12550

www.manheim.com


NEW 5 YEAR AGENT CONTRACT

REQUIRED BY PENNDOT

By Arie Garcia, Director of Operations, PIADA-MDIADA-DEIADA

Please be advised that PennDOT has replaced the current

3 year agent contract with a new 5 year agent contract for

processing title work in Pennsylvania. There are some changes

that you should be prepared for and aware of:

1. You will need to resubmit requirements (such as criminal

background checks, reference letters, site photos) for

the new 5 year contract.

2. We recommend that you begin to you work on your

requirements at least 6 months before your existing

contract expires.

3. You will need a storage area that is either (i) a secured

room with no windows and that has a solid door with a

dead bolt lock, OR (ii) instead of a separate secure room

you can have a safe dead-bolted to the floor inside your

sales office. This storage area should be large enough

to hold your PennDOT inventory (such as temp tags,

unused MV1 and MV4ST forms, SA2 paper, registration

stickers, and all completed paperwork not yet submitted

for processing).

4. You will also be required to have a shredder on site.

5. A Fraud Hotline poster is required to be posted at your

dealership. You can order this poster from PIADA at

717.238.9002.

6. You must also have a current Issuing Agent Training

Certificate to include with your requirements. (Please

keep the original and submit a copy of the Training

Certificate. You are required to attend an Agent Training

class every two years. See page ___ for classes

provided in 2016 by PIADA.

If you have questions or need assistance with your new

agent contract, please contact Arie Garcia at 717.238.9002

ext. 13. 3

16 | APRIL 2016 MIDATLANTIC DEALER NEWS


PENNSYLVANIA • NEW YORK • NEW JERSEY • MARYLAND • DELAWARE

MARIADA

2016

MID-ATLANTIC REGIONAL INDEPENDENT

AUTOMOBILE DEALER ASSOCIATION

SATURDAY AND SUNDAY, NOVEMBER 5-6, 2016

LOEWS HOTEL IN DOWNTOWN PHILADELPHIA, PA

MARIADA 2016 CONFERENCE

WHO SHOULD ATTEND?

Owners - General Managers – Sales Managers - F&I Managers – Sales People – Title Clerks –

Office Managers

TM

WHY YOU NEED TO ATTEND…

Only Regional IADA in the Nation

New Line-up of Speakers!

The Top Names in the Industry on Sales

Training, Closing Deals, National Industry

Issues, and More!

Tips to Increase Sales, Improve your

Dealership Operations and Employee and

Customer Relations

Exhibit Hall – Meet with Top Industry

Vendors and Service Providers

Network with Fellow Dealers and Industry

Leaders

It’s FREE to Attend for Members!

You Have Nothing to Lose and

Everything to Gain!

CONTACT PIADA – MDIADA – DEIADA AT 717.238.9002 FOR MORE DETAILS!

BILL CLEMENT – Keynote Speaker

Two – Time Stanley Cup Champion

with the Philadelphia Flyers

Critically Acclaimed Author,

Speaker, Actor, Entrepreneur and

Broadcaster

Author of Everyday Leadership:

Crossing Gorges on Tightropes

to Success with foreword by

Wayne Gretzky

h


ROBERT C. KEATON

Bob is a Senior Associate

at Bigley and Blikle,

LLC. Bob has worked in

government affairs as a

corporate lobbyist with

Sunoco, Inc. and as a

Policy Director for former

Governor Tom Ridge. Most

recently, he worked as the

Legislative Director for

NFIB.

POLITICAL CAMPAIGNS

IMPACT LEGISLATION AND POLICY

By Robert C. Keaton, Senior Associate, Bigley and Blikle, LLC

Every two years in Pennsylvania, half the State Senate and all of the State House are up for

election, and for 2016, it is no different. All of us know that it is the season because we start

to get the endless fliers in our mailboxes and TV ads promising us these candidates will make

us safer and fix our problems.

Once the general election is behind us and the candidate who knocked on your door is now

holding office, we hope that the failure of the state of Pennsylvania to pass a budget will be

something of the past.

Many people believe that a lot of this problem comes from a process called gerrymandering.

In 1812, Governor Eldridge Gerry signed a bill that redistricted Massachusetts to benefit his

Democratic-Republican Party. The word “gerrymander” was used by the Boston Gazette in reaction

to this redrawing of Massachusetts’ state Senate election districts under Governor Gerry.

The process is actually called redistricting, a process of drawing legislative districts every 10

years to more accurately reflect population changes. In Pennsylvania, the Legislature is given

authority in creating a redistricting plan after each U.S. Census – for both state legislative seats

and federal Congressional seats.

Often times this plan favors incumbents and the majority party that drafts the legislative plan.

As a result, most legislative districts are effectively non-competitive between the two political

parties. In those districts the election that really counts is the primary election to determine the

candidate of whichever party controls that district.

Primary elections have lower voter turnout than general elections. So the most extreme and

passionate elements of each party have a disproportionate impact on primary elections. That's

why both political parties can be dominated by some of the most extreme and uncompromising

members.

As a side comment, this argument has been made for decades in Pennsylvania that gerrymandering

causes gridlock. In 1986 the Republicans had control and set the legislative lines

for State House and Senate districts and then turned around and lost control of the House.

Many seats were held by Democrats in heavily concentrated Republican areas.

What does all of this mean to the legislative process? Everything. Why? Getting elected is

the only way to hold office and write laws. As long as officeholders need to sway the voters on

Election Day back home, it will be harder and harder to find consensus on issues like a budget,

pension reform or liquor privatization.

Is that good or bad? Like most things in life that depends where you are sitting in the stands

or playing in the game. Like any game, you play by the rules and accept victory or defeat, regardless

of whether the officials need glasses or not. 3

ATTENTION: Official Inspection Stations, Quality Assurance Officers, and Pennsylvania State Police

BI16-02 Vehicle Inspection Division Bulletin February 2016

ANNOUNCEMENT: ELIMINATION OF REGISTRATION STICKERS

Effective December 31, 2016, PennDOT will no longer issue Vehicle Registration Stickers. Act 89, signed into law in November

2013, provided for the elimination of Vehicle Registration Stickers. Vehicle Registration Stickers will no longer be required

to be displayed on the license plate.

Vehicle owners are still required to maintain a valid current vehicle registration card for presentation to a safety inspection

station for purpose of the safety inspection.

If you have any questions, please contact the Vehicle Inspection Division at (717) 787-2895.

20 | APRIL 2016 MIDATLANTIC DEALER NEWS


AMERICA’S AUTO AUCTION HARRISBURG HOSTED

FIRST LIVE AGENT SEMINAR OF 2016

By Reg Evans

Those dealers who needed their 2-year Agent Training advanced class required by PennDOT attended our first live class of

the year at America’s Auto Auction Harrisburg on Monday, March 20, 2016.

Agent Trainer Arie Garcia - who also is Director of Operations at PIADA-MDIADA-DEIADA - presented the PennDOT agent education

class to a packed house. America’s Auto Auction Harrisburg provided everyone with a comfortable class atmosphere

and delicious hot food. The class was live, efficient, informative, and on-time at four hours and not a minute more.

Many thanks to GM Lynn Weaver, AGM and PIADA-MDIADA-DEIA-

DA Director Clint Weaver, and everyone at America’s Auto Auction

Harrisburg for the hospitality.

If you need to get your training to meet the 2-year requirement,

see the Agent classes list on page 23. 3

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愀 甀 琀 漀 甀 猀 攀 ⸀ 挀 漀 洀

MIDATLANTIC DEALER NEWS APRIL 2016 | 21


Alan Mosher is a car

guy. His first job ever

was detailing cars at a

dealership when he was

in high school. He began

selling cars in 1975,

and has been in the car

business in one form or

another for most of the

40 years since. Half of

that time he has been

in the BHPH business.

He has operated BHPH

dealerships for 8 years

and been a trainer and

consultant in the business

for 11. He can be

reached via email at al@

alanmosher.com.

YOUR MOST IMPORTANT COLLECTION TOOL

By Al Mosher

I often begin collections training classes by asking students what the most important

collection tool is at their dealerships. I get answers ranging from the telephone to the tow

truck, but I have never had a student give me the correct answer.

The correct answer is your loan application. If you want to successfully collect the loans

you make to your buy-here, pay-here customers, it starts way before they ever make their

first payment. It starts with the application. Collecting enough of the right information in the

beginning will make collecting your money easier throughout the term of the loan.

There are two keys to taking a proper application contained in that last sentence:

First, collect enough information. I have seen dealers who collect just the typical ‘5-line’

application of name, address, phone number and social security number and that’s it. How

can you possibly make a lending decision on that limited information much less effectively

collect that account?

You need to collect sufficient information so that you feel comfortable that you can make

contact with that customer no matter what. That should include at least 3 years of residence

and employment information and as many references as possible. The more points of possible

contact you obtain, the more likely it is that one of them will know how to put you in touch

with your customer.

You also need to make sure your customer can afford to make his or her loan payment

when it comes due. In order to determine this, you need as much information as you can get

about the customer’s monthly budget. When you add up his rent, utilities, and other monthly

expenses then subtract that from his net income, there should be enough left over to make

your payment or you are setting your customer up to fail and creating a future collections

problem.

The second key is to collect the right information. I regularly see dealers who allow

their prospective customers to complete their own applications. This is a sure-fire way to

get the wrong information. Customers who complete their own applications will give you

the information that makes them look best and leave out the information that might make

them look like a bad risk. They tend to leave off those short time residences and jobs and

expand residence and job time and income. They aren’t likely to tell you about a previous

repossession or bankruptcy. In order to make an intelligent lending decision and then to

successfully collect that account, you need all the information you can possibly get. Taking

the application yourself gives you the opportunity to probe for missing information and dig

for those nuggets the customer might be trying to hide.

You also need to verify that information. Collecting written proof of residence and income

helps you make sure you have the right information. But they can be misleading, as well. Utility

bills and paycheck stubs are a snapshot in time. They were true when they were printed but

they may not be true today. You need to call landlords and employers to verify the information

on those documents. I have never forgotten a lesson I learned over 15 years ago as a new

manager at a BHPH store. I was calling an employer to verify employment. He hesitated when

answering my question on whether the customer was still employed there. I asked if there

was any problem and he told me he was laying my potential customer off the next day. If I

had accepted the paycheck stub as the whole truth, I would have had a customer with a new

car who became unemployed almost instantly.

The right information should also include any information on previous vehicles and how

they were purchased including any repossessions. An understanding on how your customers

have handled previous vehicle purchases can give you valuable insight on how they might

handle their obligation to you.

I talked above about collecting references above, but just collecting names and phone

numbers alone does not make up the total right information. You need to learn how the

customer knows each of their references. That will help you to determine each one’s value as

a resource for making contact with the customer in any given situation. You should also verify

that each reference does, in fact, know and have good things to say about your applicant.

Collecting names and phone numbers does you no good if you don’t talk to them until you

need to make contact with your customer. That is a bad time to find out all the numbers are

no good or that the reference hasn’t spoken to your customer in years.

Collecting the money due to you and your dealership is the most critical part of any BHPH

dealership. Cash flow is the life blood of your business. Don’t start out in a hole by not getting

all the information you can when you begin your relationship with each customer. Taking a

thorough, complete and verified application in the beginning can make collecting that account

much easier throughout the life of that loan and save you from the pain and heartache of

repossession at the end. 3

22 | APRIL 2016 MIDATLANTIC DEALER NEWS


◊ Garage and Automobile Liability

Dealer Physical Damage

◊ Tow Truck on the Same Policy

◊ Quick Quote Turnaround

◊ Low Monthly Payments

607 Corporate Drive, West

Langhorne, PA 19047

215-860-6510 Tel.

www.KramerInsuranceCenter.com

BelAir_4.22x5.65_ad.pdf 1 12/11/13 10:51 AM

2016 PIADA ISSUING AGENT

TRAINING COURSES

Due to previous lack of attendance in Basic Training Classes

PIADA has only scheduled Advanced Training for 2016.

However, if you are interested in a Basic Class please contact

PIADA at 717.238.9002. Classes subject to cancellation/

change at the sole discretion of PIADA.

PIADA Members: $50.00 per person

Non-Members: $125.00 per person

PREPAYMENT REQUIRED. NO WALK-INS.

PRE-REGISTERED ATTENDEES ONLY.

Registration: 8-8:30am • Courses begin at 8:30am

ADVANCED TRAINING CLASS DATES

April 11................................................. ADESA Pittsburgh

Sponsored by Annual Gold Sponsor ProGuard Warranty

May 16... Northeast Pennsylvania (Arcaro & Genell’s Restaurant)

Sponsored by Annual Gold Sponsor ProGuard Warranty

June 20........................................... Manheim Philadelphia

Sponsored by Annual Gold Sponsor ProGuard Warranty &

Annual Bronze Sponsor NextGear Capital & Autotrader

August 8........................ Central Pennsylvania Auto Auction

Sponsored by Annual Gold Sponsor ProGuard Warranty &

Annual Bronze Sponsor MyDealerOnline

September 12................................................ Garden Spot

Sponsored by Annual Gold Sponsor ProGuard Warranty &

Annual Bronze Sponsor MyDealerOnline

September 26....................................................Corry ADE

Sponsored by Annual Gold Sponsor ProGuard Warranty &

Annual Bronze Sponsor NextGear Capital & Autotrader

October 24................................................. ADESA Mercer

Sponsored by Annual Gold Sponsor ProGuard Warranty

C

M

Y

CM

MY

CY

CMY

K

COURSE REGISTRATION

Company_____________________________________________________

Contact______________________________________________________

PIADA Member? Yes No DIN # ______________________________

E-mail Address ________________________________________________

Business Address_______________________________________________

City_______________________________ State_______Zip Code________

Phone (____) ___________________Fax (____)______________________

Number Attending ______

NAMES OF ATTENDEES:

___________________________________________________________

___________________________________________________________

___________________________________________________________

___________________________________________________________

Card Type: VISA MasterCard Discover American Express

Name on Card:_________________________________________________

Card Number __________________________________________________

Security Code ___________ Exp. Date______________________________

Signature______________________________________________________

Fax (We’d prefer fax) to 717.238.3870

Or Mail to: PIADA, 1501 North Front Street, Harrisburg, PA 17102

ON-SITE CLASSES AT YOUR DEALERSHIP CAN

BE REQUESTED!!! CALL PIADA FOR DETAILS.

MIDATLANTIC DEALER NEWS APRIL 2016 | 23


AUCTIONDIRECTORY

PENNSYLVANIA

ABC - LANCASTER AA

1040 Commercial Ave., P.O. Box 406

East Petersburg, PA 17520

Phone: 717.569.5220 / Fax: 717.569.3109

Greg Gehman, Owner/Operator; Ed Fazio, GM

Weekly Sales Wed. 9:00 A.M.

Office: M-F 8:30-5:00

www.abclancaster.net

ADESA MERCER

758 Franklin Road, Mercer, PA 16137

Phone: 724.662.4500 / Fax: 724.662.2840

Barry Fabricant, GM; Sharon White, Fleet Manager

Friday 9:00 A.M.

Office: M-F 8-5:00

www.adesa.com

ADESA PA

I-83 Ex. 28 (Old Ex. 12),

30 Industrial Rd., York, PA 17406

Phone: 717.266.6611 / Fax: 717.266.7650

George Johnson, GM

Angel Alicea, Fleet Manager

Igor Skinder, Sales Manager

Wednesday 8:20 A.M.

Powersports Sale, 4th Wed. of every month

www.adesa.com

ADESA PITTSBURGH

378 Hunker Waltz Mill Rd., New Stanton, PA 15672

Phone: 724.925.4700 / Fax: 724.925.4701

Bernie Nemec, Dealer Contact

Tuesday 9:00 A.M.

www.pittautoauction.com

AMERICA'S AA - HARRISBURG

1100 S. York St., Mechanicsburg, PA 17055

Phone: 717.697.2222 / Fax: 717.697.2234

Lynn Weaver, GM; Clint Weaver, AGM; John

Congdon, Operations Manager; Sharon Guise,

Office Manager; Tom Wesner, Dealer Sales; Tammy

Leppo, Dealer Sales; Randy Donovan, Dealer

Sales; Glenn Gochenaur, National Accounts

Every Thursday 8:45 A.M.

www.harrisburgautoauction.com

AMERICA’S AA - PITTSBURGH

55 E. Buffalo Church Rd.

Washington, PA 15301

Phone: 724.225.1777 / Fax: 724.225.7223

Lou Craig - GM; Skip Thomas - GM

Thursday 12:30 P.M.

www.americasautoauction.com

BLOOMSBURG AUTO AUCTION

25 Ridge Road, Bloomsburg, PA 17815

Phone: 570.784.2306

Wednesday 1:00 P.M.

John and Heather Vance, Owner/Operators

www.bloomaa.com

CENTRAL PENNSYLVANIA AA

Exit 178 of I-80, Lock Haven, PA 17745

Phone: 800.248.8026 / Fax: 570.726.7841

Grant Miller, Owner; Doug Miller, V.P./COO

Tim Keohane, GM

Thursday 10:00 A.M.

Office: MTF 8-5:30 W-Th 8-6:00

www.cpaautoauction.com

CORRY AUTO DEALERS EXCHANGE

P.O. Box 317, Route 6, Corry, PA 16407

Phone: 814.664.7721 / Fax: 814.664.7724

Tad Swift, Auction Manager

Jeri Elmquist, Dealer Contact

Thursday 10:00 A.M.

www.corryade.com

GARDEN SPOT AUTO AUCTION

Robert Rd. & Apple St., Ephrata, PA 17522

Phone: 717.738.7900 / Fax: 717.738.7930

Kevin Luring, Marketing Manager; Kristi Kohl, GM

Omar Landis, Owner

Tuesday 10:00 A.M.

www.gardenspotautoauction.com

GREATER ERIE AUTO AUCTION

7700 Avonia Road, (Exit 16 of I-90 & PA Route 98)

Fairview, PA 16415-0916

Phone: 814.474.3900 / 877.474.GEAA

Fax: 814.474.4969

Todd Briggs, Co-Owner/GM; Chuck Williams,

Dealer Contact/Sales Manager; Todd Briggs, Fleet

Lease Repo Contact; Scott Porter, Transportation

Re-Con Manager; Chrissy Briggs, Marketing Manager

Tuesday 2:30 P.M.

www.greater-erie.com

MANHEIM KEYSTONE PENNSYLVANIA

488 Firehouse Road, Grantville PA 17028

Phone: 717.469.7900 / Fax: 717.469.2842

Sal Cuomo, Manager

Tamra Habbershon, Dealer Services Manager

Shirley Kennedy, Office Manager

Every Monday 11:00 A.M.

www.manheim.com

MANHEIM PENNSYLVANIA

1190 Lancaster Rd., Manheim, PA 17545

Phone: 717.665.3571 / Fax: 717.665.9265

Joey Hughes, VPGM; Tim Doyle, AGM; Kevin Gantz,

AGM; Amy Taitano, AGM; Sal Cuomo, AGM; Randy

Derr, AGM; Darren Teague, Auction Manager

Exotic Highline Sales every other Thurs.- 9:00 A.M.

Every Friday Sale 8:30 A.M.

www.manheim.com

MANHEIM PHILADELPHIA AA

2280 Bethlehem Pike, Hatfield, PA 19440

Phone: 215.822.1935 / Fax: 215.822.8140

Charles Pollina, GM; Scott Mulligan, AGM

Gregg Pachik, Dealer Services Manager

Troy Moyer, Commercial Accounts Manager

Tuesday 9:30 A.M.

TRA Sale - Tuesday 1:00 P.M.

Office: M-Th 8:30-5 F 8:30-3

www.manheim.com / www.traauctions.com

MANHEIM PITTSBURGH AA

21095 Route 19, Cranberry Twp., PA 16066

Phone: 724.452.5555 / Fax: 724.452.1310

Tom McDonald, GM; Chris O’Donnell, AGM

Shawn Byers, Commercial Accounts Manager

Craig Hartle, Dealer Services Manager

Wednesday, 9:00 A.M.

www.manheim.com

NORTH EAST PENNSYLVANIA AA

860 N. Keyser Ave., Scranton, PA 18504

Phone: 570.207.CARS / Fax: 570.207.1860

James Gaughan, Owner; Joseph Gaughan, Dealer

Contact; Lisa Cohowicz, Dealer Contact

Kevin Jennings, Dealer Cnt/F-L

Tuesday 10:00 A.M.

www.nepautoauction.com

ORANGEVILLE AUTO AUCTION

2040 St., Rt. 487, Orangeville, PA 17859

Phone: 570.683.4006 / Fax: 570.683.4018

Brenda Hartzel, Dealer Contact

Angela Dawson, Dealer Contact

Wednesday 10:00 A.M.

www.orangevilleautoauction.com

PERRYOPOLIS AUTO AUCTION

Route 51 S. Perryopolis, PA 15473

Phone: 724.736.4445 / Fax: 724.736.0466

Renee Smith, Director of Operations

Friday 9:45 A.M.

www.perryautoauction.com

Spend $399 - Get $20,000 in Discounts

on Auction and Industry Products &

Services. Join PIADA-MDIADA-DEIADA,

NJIADA, NYIADA Today!

MARYLAND

BSC AMERICA/BEL AIR AUTO AUCTION

803 Bel Air Rd., Bel Air, MD 21014

Phone: 410.879.7950 / Fax: 410.893.1515

R. Charles Nichols, President;

Michelle Nichols-Neff, Vice President;

Cindy Mitchell, VP of Fleet Operations;

Mike Corrado, Dealer Sales; Chuck Wenzel,

Dealer Sales; John Bellus, Dealer Sales;

Christina Thorneycroft, Dealer Sales

Thursday 8:30 A.M.

www.bscamerica.com

MANHEIM BALTIMORE-WASHINGTON

7120 Dorsey Run Rd., Elkridge, MD 21075

Phone: 410.796.8899 / Fax: 410.799.0512

Toll Free: 800.533.2923

Steve Sirianni, GM; Rich Pomplun, AGM

Sherry Houghtling, Dealer Sales Mgr.

Jeffrey Judkins, OVE Rep.

Tuesday Sale starting @ 9:30 A.M.

TRA Salvage Sale @ 1 P.M.

www.manheim.com

NEW JERSEY

ADESA AUCTION OF NEW JERSEY

200 N. Main, Manville, NJ 08835

Phone: 908.725.2200 / Fax: 908.725.3446

Craig Estep, GM

Consignment Sale Thursdays 8:45 A.M.

Topline Sale 9 A.M. monthly Thursdays

GM Factory Sale Bi-weekly Tuesdays 10 A.M.

www.adesa.com

MANHEIM NEW JERSEY AA

730 Rte. 68, P.O. Box 188, Bordentown, NJ 08505

Phone: 609.298.3400 / Fax: 609.298.4489

Pete Sauber, GM; Greg Conover, AGM

Wednesday 9 A.M.

www.manheim.com

NEW YORK

ADESA BUFFALO

12200 Main St., Akron, NY 14001

Phone: 716.542.3300 / Fax: 716.542.3547

Warren Clauss, GM, Mike Phillips, Assistant GM

Consignment Sale Tuesday 9 A.M.

Boat & RV Sale 2nd Tuesday Monthly 11 A.M.

Ford Factory Tuesday Monthly 9 A.M.

Office: M-Tu: 8-5, W: 8-4, Th: 9-4, F: 9-3

www.ADESA.com/Buffalo

ADESA LONG ISLAND

425 Patchogue Yaphank Rd., Yaphank, NY 11980

Noel Nixon, GM

631.205.5000

www.adesa.com/LongIsland

ADESA SYRACUSE

5930 State Rte. 31, Cicero, NY 13039

David Taylor, GM

315.699.2792

www.adesa.com/Syracuse

SWADE SCRANTON/WILKES-BARRE ADE

11 R. South Keyser Ave., Taylor, PA 18517

Phone: 570.961.3800 (Scranton)

Phone: 570.823.2800 (Wilkes-Barre)

Fax: 570.562.1344

Justin Priblo, Dealer Contact

Dottie Arnone, Office Manager

Gene Scagliotti, Owner

Monday 6:00 P.M.

www.swadeaa.com

BUFFALO AUTO AUCTION

8418 Southwestern Blvd., Angola, NY 14006

716.549.4800

Sally Schueckler, GM

sschueckler@buffaloautoauction.biz

MANHEIM ALBANY

459 Route 146, Clifton Park, NY 12065-0440

518.371.7500

Jay Waterman, GM

jay.waterman@manheim.com

MANHEIM NEW YORK AA

2000 Dealer Drive, Newburgh, NY 12550

Phone: 845.567.8400 / Fax: 845.567.8410

Mark Pester, GM / Darryl Vrooman, AGM

Sale Day Wednesdays 9 A.M.

Monthly Tuesday Ford Factory Sales 10 A.M.

3rd Tuesday of the Month Specialty Sales 10 A.M.

1st Wednesday of the Month Heavy Truck &

Equipment Sales 10 A.M.

Office: M,T, Th 9-5, W 7-6, F 9-1

www.manheim.com

ROCHESTER’S CENTRAL AUTO AUCTION

20 Cairn Street, Rochester, NY 14611

Julie Quinn, GM

585.328.2277

Info@rochesterautoauction.com

ROCHESTER- SYRACUSE AUTO AUCTION

1826 State Route 414, P.O. Box 129

Waterloo, NY 13165

315.539.5006

Scott Prankie, GM

sprankie@rsautoauction.com

STATE LINE AUTO AUCTION

830 Talmadge Hill Rd. S., Waverly, NY 14892

Phone: 607.565.8151 / Fax: 607.565.8659

Jeff Barber, Owner; Jim Terwilliger, Sales Manager

Neal McEwen, Fleet/Lease Manager

GM Closed Factory Sale Alternate

Thursdays @ 10:00 A.M. Sharp

Dealer Consignment Sale

EVERY Friday @ 9:20 A.M.

www.statelineauto.com

ADDITIONAL STATES

MOUNTAIN STATE AUTO AUCTION

Route 2, Box 835, Shinnston, WV 26431

Phone: 304.592.5300 / Fax: 304.592.3510

Chad Garrison, GM; Joe Pyle, Owner

Monday 10:30 A.M.

Office: 9-5:00

www.mtstateaa.com

WINCHESTER AUTO AUCTION

12828 Winchester Ave., Bunker Hill, WV 25413

Phone: 304.229.4400 / Fax: 304.229.9067

David Angelicchio, Chairman & CEO; Dennis

Angelicchio, President; Bryan Dougherty, GM

Friday 10:00 AM

www.WinchesterAA.com

YORKMONT AUTO AUCTION

799 South Main Street, Fair Haven, VT 05743

Phone: 802.278.8057 / Fax: 802.457.7110

Shawn@camaraslate.com

24 | APRIL 2016 MIDATLANTIC DEALER NEWS


MARYLAND FORMS DEALERS CAN ORDER

SECURE FORMS QUANTITY PRICE TOTAL $ DUE

Secure Power of Attorney (3 part-50 per pad) _____ $

20. 00* $

________

Secure Dealer Reassignment (1 part-100 per pad) _____ $

20. 00 $ ________

Total Secure forms order $ ________

6% Maryland Sales Tax ________

TOTAL enclosed for Secure forms $ _________

*The prices for secure forms include FedEx shipping. Add $4.00 if shipping to residential address.

NON-SECURE FORMS QUANTITY $

MEMBER NON- $ MEMBER TOTAL $ DUE

Cash Sales Contracts (100 per pack) _____ $

47. 00 $ 94. 00 $

________

Odometer Mileage Statement (100 per pack) _____ $

18. 00 $ 36. 00 $ ________

FTC Buyers Guide (100 per pack) _____ $

28. 00 $ 56. 00 $ ________

Check one: AS IS IMPLIED

Restricted Power of Attorney (100 per pack) _____ $

10. 00 $ 20. 00 $ ________

Deal Jackets (100 per pack) _____ $

24. 00 $ 48. 00 $ ________

Test Drive Agreements (100 per pack) _____ $

28. 00 $ 56. 00 $ ________

Total Non-Secure forms order $ ________

6% Maryland Sales Tax ________

TOTAL enclosed for Non-Secure forms $ _________

TOTAL AMOUNT DUE $ _________

Dealership_________________________________________________________________________

Dealer # (required)__________________________________________________________________

Member Yes No Contact Name____________________________________________

Email______________________________________________________________________________

Address___________________________________________________________________________

(FEDEX & UPS WILL NOT DELIVER TO P.O. BOX)

City_______________________________________________State ______Zip__________

Phone ______________________________Fax_______________________________________

Card Type: VISA MasterCard AMEX

Name on Card____________________________________________________ Exp. Date________

Card Number _____________________________________ Security Code________

Make checks payable to: PIADA or fill out payment information below:

Card Type: VISA MasterCard AMEX Discover

Name on Card____________________________________________________ Exp. Date________

Card Number _____________________________________ Security Code________

We cannot process orders until payment is received.

Signature ____________________________________________ Date____________________

NOTE: If you are ordering both Secure and Non-Secure forms today, you will receive

separate shipments. Secure Forms are shipped from a warehouse in Virginia.

Non-Secure forms are shipped from PIADA headquarters. Revised Order Form as of

August, 2015. For questions you may email Shannon@piada.org

FOR INFORMATION ON MEMBERSHIP...

PIADA – MDIADA – DEIADA

Contact Shannon at 717.238.9002 x 18

Shannon@piada.org

www.piada.org • www.mdiada.org • www.deiada.org

NYIADA & NJIADA

Contact Paula at 855.694.2324

nyiada.pfrendel@gmail.com

www.newyorkiada.org • www.newjerseyiada.org

I. A. D. A.

Pennsylvania | Maryland| Delaware

United We Stand

PENNSYLVANIA FORMS DEALERS CAN ORDER

DESCRIPTION QUANTITY $

MEMBER NON- $ MEMBER MEMBER EXT NON-M EXT

“As is” Supplemental Statement _____ $

24. 00 $

48. 00 $

_______

$

_______

Buyers Guide Plastic Holders (50) _____ $

40. 00 $

80. 00 $

_______

$

_______

Buyers Guide Window Form _____ $

18. 00 $

36. 00 $

_______

$

_______

Buyers Guide Window Form (Spanish) _____ $

18. 00 $

36. 00 $

_______

$

_______

Consignment & Sales Agreement Form _____ $

18. 00 $

36. 00 $

_______

$

_______

Deal Jackets _____ $

24. 00 $

48. 00 $

_______

$

_______

Fees Chart (wall mount) _____ $

14. 00 $

28. 00 $

_______

$

_______

Installment Sales Contract (100) _____ $

75. 00 $

150. 00 $

_______

$

_______

Key Tags (250) _____ $

32. 00 $

64. 00 $

_______

$

_______

Lease Agreements _____ $

53. 00 $

106. 00 $

_______

$

_______

Limited Warranty _____ $

26. 00 $

52. 00 $

_______

$

_______

No Purchase Required Disclosure _____ $

24. 00 $

48. 00 $

_______

$

_______

Notary Receipt Pad _____ $

15. 00 $

30. 00 $

_______

$

_______

Notary Register _____ $

15. 00 $

30. 00 $

_______

$

_______

Odometer Mileage Statement _____ $

18. 00 $

36. 00 $

_______

$

_______

Power of Attorney Disclosure Forms _____ $

18. 00 $

36. 00 $

_______

$

_______

Rental Agreements _____ $

32. 00 $

64. 00 $

_______

$

_______

Retail Buyer Order Form _____ $

32. 00 $

64. 00 $

_______

$

_______

Secure Power of Attorney _____ $

55. 00 $

55. 00 $

_______

$

_______

Secure Power of Attorney Log Book _____ $

15. 00 $

30. 00 $

_______

$

_______

Temp Tag Log Book _____ $

15. 00 $

30. 00 $

_______

$

_______

Title Release Authorization _____ $

15. 00 $

30. 00 $

_______

$

_______

Used Vehicle Record _____ $

15. 00 $

30. 00 $

_______

$

_______

ADP FORMS

Customer Delivery Check List _____ $

28. 00 $

56. 00 $

_______

$

_______

Customer Proposal _____ $

28. 00 $

56. 00 $

_______

$

_______

Damage Disclosure _____ $

28. 00 $

56. 00 $

_______

$

_______

Delivery Confirmation _____ $

28. 00 $

56. 00 $

_______

$

_______

Goodwill Repair Acknowledgement _____ $

28. 00 $

56. 00 $

_______

$

_______

Insurance Coverage Acknowledgement _____ $

28. 00 $

56. 00 $

_______

$

_______

Interpreter Confirmation of Translation _____ $

28. 00 $

56. 00 $

_______

$

_______

Lease Spot Delivery Agreement _____ $

28. 00 $

56. 00 $

_______

$

_______

Notice to Co-Signer _____ $

28. 00 $

56. 00 $

_______

$

_______

Test Drive Agreement _____ $

28. 00 $

56. 00 $

_______

$

_______

Trade-In Appraisal _____ $

28. 00 $

56. 00 $

_______

$

_______

$

Subtotal _______

$

_______

6% Pennsylvania Sales Tax $ _______

$

_______

Shipping $ per pound + Special Shipping $ at cost. Total w/o shipping $_________

Please make checks payable to PIADA, 1501 North Front St., Harrisburg, PA 17102

(call in to receive shipping cost to include in payment) or you may fax orders to

717.238.3870 with credit card information. *All orders MUST be accompanied by a

method of payment. *Must provide DIN if applicable.

Dealership_________________________________________________________________________

Contact_______________________________________________Date_________________

Address___________________________________________________________________________

City_______________________________________________State ______Zip__________

Phone _____________________Fax ____________________*DIN____________________

Card Type: VISA MasterCard AMEX

Name on Card____________________________________________________ Exp. Date________

Card Number _____________________________________ Security Code________

MIDATLANTIC DEALER NEWS APRIL 2016 | 25


WHAT EDMUNDS SAYS ABOUT

NEAR RECORD CPO VEHICLE SALES

From Press Reports Issued by Edmunds.com

Used car sales climbed 5.6 percent last year to a total of

38.3 million making last year the best for pre-owned sales

since 2007, according

to a new report from

Edmunds.com.

The 2015 Used Vehicle Market Report said 2015 was

a milestone year that saw record high used car prices (an

average of $18,600 per vehicle sold) and an all-time high for

certified pre-owned (CPO) sales (2.55 million).

“The key factor

driving all of the trends

in used car sales

today is the popularity

of leasing, which is

bringing younger and

higher quality used cars

back to the market,”

said Edmunds.com

Director of Industry

Analysis Jessica

Caldwell. “We’re truly

in the midst of a Golden

Age for CPO and nearnew

used cars. And

with a record number

of lease terminations

expected in 2016, for the foreseeable future there certainly

will be no shortage of supply to meet the growing demand

for used cars.”

Highlights of data and insights found within the report include:

• Highest Sales in Almost a Decade – The 38.3 million used

car sales recorded in 2015 was the highest single-year

total since 2007, when 38.39 million used cars changed

hands. Franchise

d e a l e r s ,

meanwhile, set a

single-year record

with 11.4 million

used car sales.

• Vehicles Get Newer,

More Expensive

– The heavy influx

of lease returns

weighed the

average age of

used vehicles sold

down to 4.4 years

in 2015 from the

previous year’s 4.6

years. 54 percent

of used vehicles

sold last year were

three years old or

younger. And average used car transaction prices set

a new record in 2015, increasing 4.6 percent from

$17,700 in 2014 to $18,600 in 2015.

• The CPO Surge – There were more certified pre-owned

sales in 2015 (2.55 million) than in any year on record. In

fact, CPO sales have increased a staggering 55 percent

in the last five years. CPO accounted for 22.4 percent of

all franchise dealers’ used car sales in 2015, up from

20.9 percent in 2014, and up from 18.8 percent in 2010.

• CPO Shoppers are

Thorough Researchers –

According to an analysis

of shopping behaviors

on Edmunds.com, CPO

shoppers clearly spend

more time researching

than all other shoppers,

with more than twice as

many page views and

session durations as

either new car shoppers

or (non-CPO) used car

shoppers. 3

26 | APRIL 2016 MIDATLANTIC DEALER NEWS


ONLINE AUTO DEALER SUPPLIES & SELLING AIDS

FULL LINE OF AUTOMOTIVE RECONDITIONING AND DETAILING PRODUCTS

DEALERGOODIES DETAIL SEMINAR

Basic: April 26th ∙ Advanced: April 27th

Must Sign Up In Advance: Call (800) 366-2141

See Your Route Salesman or Visit www.dealergoodies.com For Details

CUSTOM DEALER IDENTIFICATION PRODUCTS

125 low cost, high impact, one color process

Auto Plate Inserts.

Starting as low as $177.00

500 Custom License Plate Frames

$400.00. Additional styles

and materials available.

Whether you prefer pre-mades or die-cut

Dealer-Cals, we have them starting at

$105.00 & $341.00

(Additional quantities and colors available for an additional cost.) Please visit our website for additional details not mentioned in our ad.

ADVERTISING AIDS

Quipall 200 AMP Port Charge All

and Jump Starter PCJS400

$134.95

3x8 Stock Avenue Banners $70.00

VEHICLE IDENTIFICATION

Swooper flag and pole kit $150.00

Replacement Flags $59.00

Versa Key Tags

250 per box

$23.00

Kleer-Bak Stock Stickers

100 per pack

$7.95

Consecu-Tags

125 per box

$60.00

Arrow I.D. Tags

2 sizes

1,000 per pack

$16.00 – $19.50

PLEASE VISIT OUR WEBSITE TO VIEW OUR HUGE SELECTION OF PRODUCTS!

88 AUCTION ROAD MANHEIM, PA 17545 800-366-2141 WWW.DEALERGOODIES.COM


LEGAL CORNER

Tom (thudson@hudco.com)

and Nikki (nmunro@hudco.

com) are partners in the

law firm of Hudson Cook,

LLP. Tom is the author of

a book, CARLAW®, and is

the Editor/author of the

CARLAW® F&I Legal Desk

Book. The books are

available at www.counselor

library.com. Tom is also

the publisher of Spot

Delivery®, a monthly

legal newsletter for auto

dealers, and the Editor

in Chief of CARLAW®, a

monthly report of legal

developments in all states

for the auto finance and

leasing industry (not to be

confused with the book).

Nikki is a contributing

author to the F&I Legal

Desk Book and frequently

writes for Spot Delivery®.

Spot Delivery®, CARLAW®

and the books are produced

by CounselorLibrary.com

LLC. For information, call

410.865.5411 or visit

www.counselorlibrary.com.

Copyright CounselorLibrary.

com 2015, all rights

reserved. Single publication

rights only, to the

Association.

HC# 4840-4850-0270

3/16)

THE CARLAWYER ©

By Thomas B. Hudson and Nicole Frush Munro

The first spring flowers are poking their way through the snow – can baseball season be

long in coming? Until someone says, “play ball!”, we’ll again peruse developments in the

auto sales, finance and lease world. This month, we feature federal developments from the

Consumer Financial Protection Bureau and the Justice Department and a state action from

Washington. We thought might interest folks during the winter doldrums. We also recap

some of the auto sale and financing lawsuits we follow each month. Remember – we aren’t

reporting every recent legal development, only those we think might be particularly important

or interesting to industry.

Why do we include items from other states? We want to show you new legal developments

and trends. Also, another state’s laws might be a lot like your state’s laws. If attorneys

general or plaintiffs’ lawyers are pursuing particular types of claims in other states, those

claims might soon appear in your state.

Note that this column does not offer legal advice. Always check with your own lawyer to

learn how what we report might apply to you, or if you have questions.

THIS MONTH’S CARLAWYER© COMPLIANCE TIP

With the Federal Trade Commission’s continuing assault on dealer advertising, why not appoint

an advertising officer to oversee your ad efforts (including your web site). Provide that person

with an advertising compliance budget and have them trained to understand federal and state

advertising rules, then have them review every new ad you run, and document the review. If

the feds come calling, your compliance efforts will likely be well received.

FEDERAL DEVELOPMENTS

Are You Furnishing Information to Credit Bureaus? On February 3, the CFPB issued a

compliance bulletin reminding furnishers of their obligation under Regulation V (Fair Credit

Reporting Act) to establish and implement reasonable written policies and procedures

regarding the accuracy and integrity of information furnished to consumer reporting agencies.

In the bulletin, the CFPB notes its focus on the accuracy of information in consumer reports

about banking history, past NSF activity, unpaid or outstanding bounced checks, overdrafts,

involuntary account closures, and fraud. The CFPB also notes that its supervisory experience

suggests that some financial institutions are not compliant with their obligations with regard to

furnishing information to specialty CRAs. The bulletin emphasizes that a furnisher’s obligation

to have policies and procedures that satisfy Regulation V’s requirement extends to information

furnished to all types of CRAs, including the furnishing of deposit account information

to specialty CRAs. The bulletin states that the CFPB will continue to monitor furnishers’

compliance with the Regulation V requirement to establish and implement reasonable written

policies and procedures regarding the accuracy and integrity of all furnished information.

Another CFPB Fair Lending Enforcement Action. On February 2, the CFPB and the Department

of Justice resolved discrimination claims against major auto finance creditor Toyota Motor

Credit Corporation. The agencies’ coordinated settlements with TMCC closely resembled

settlements reached previously with American Honda Finance Company and Fifth Third Bank.

The CFPB and the DOJ alleged that TMCC’s policy of buying retail contracts from dealers having

rates up to 250 basis points over TMCC’s wholesale buy rate resulted in African-American

and Asian/Pacific Islander buyers paying auto financing rates higher, on average, than non-

Hispanic white consumers, without regard to their creditworthiness. Under the orders, TMCC

will pay up to $21.9 million in restitution to an unspecified number of consumers. The consent

orders require TMCC to limit dealer discretion in setting rates to no more than 1.25% or 1%

over the applicable buy rate, depending on the term. TMCC also has the option of moving to

non-discretionary dealer compensation. CFPB Director Richard Cordray announced that TMCC

had committed not to raise its buy rates to cover “any additional nondiscretionary component

of dealer compensation,” but this commitment does not appear in the CFPB’s order.

Complain, Complain, Complain. On January 28, the CFPB released its monthly complaint

report, which highlights trends in the complaint data the CFPB receives through its Consumer

Complaint Database. The report includes complaint data specific to certain companies, overall

complaint volume and complaint volume by state, and other trends in the data. Each month,

the report spotlights complaints about a particular issue and from a particular geographic

location. The latest report focuses on financial services such as debt settlement, check

cashing, money orders, and credit repair and highlights complaints from consumers residing

in New York State.

28 | APRIL 2016 MIDATLANTIC DEALER NEWS


STATE ENFORCEMENT ACTIONS

On January 15, the Washington State attorney general

announced a settlement with a car dealership that allegedly

sent promotional mailers that looked similar to the National

Highway Traffic Safety Administration’s recall notifications.

The mailers notified recipients of possible recalls and offered

to buy their vehicles, but failed to clearly and conspicuously

disclose that the offer to buy was independent of any recall

notification. The dealership will pay approximately $74,000

to resolve allegations that the mailers misled consumers in

violation of the state Consumer Protection Act.

LITIGATION

Arbitration Agreement Signed in Connection with Vehicle

Sales Contract Deemed Void Remains Enforceable: A car

buyer signed a retail buyers order, an installment sale contract,

and an arbitration agreement at the time of purchase. She

sued the dealer for violating the Missouri Merchandising

Practices Act by failing to provide title to her new vehicle. The

dealer moved to compel arbitration, and the trial court denied

the motion. The trial court concluded that the sale contract

was fraudulent and void because the dealer did not provide

title at the time of sale or since. Because the arbitration

agreement should be construed with the other contract

documents, the trial court found it was void and unenforceable

as well. The Supreme Court of Missouri noted that, under

the governing Federal Arbitration Act, arbitration agreements

are severable and considered separate from any underlying

related agreements and, therefore, are enforceable unless

the arbitration agreement itself is invalid under generally

applicable state law principles. Relying on U.S. Supreme

Court precedent, the state high court concluded that the

unenforceability of the sale contract in this case was irrelevant

to the enforceability of the arbitration agreement contained

within or executed contemporaneously with the sale contract

because the buyer did not directly challenge the arbitration

agreement. See Ellis v. JF Enterprises, LLC, 2016 Mo. LEXIS

4 (Mo. January 12, 2016).

RISC Assignee Properly Cured Usurious Contract: After taking

assignment of an installment sale contract for the purchase

a used car, the assignee discovered that the contract rate

was greater than the 24% maximum rate allowed by the

Maryland Credit Grantor Closed End Credit Provisions. The

assignee cured the error within 60 days of the discovery, as

permitted by CECP, by reducing the rate to 23.99%, crediting

the buyer’s account for excess interest, and sending the

buyer a cure notice to notify him of the error. After the buyer

missed payments on the contract, the assignee attempted to

collect the debt. The buyer sued the assignee for breach of

contract and violations of CECP and the Maryland Consumer

Debt Collection Act. The buyer alleged that the cure was

untimely, the cure notice was too vague, the assignee was

required to refund all interest that was collected, and the

assignee made false representations in connection with its

collection efforts. The trial court granted summary judgment

for the assignee, and the federal appellate court affirmed

with respect to the CECP and breach of contract claims, but

reversed and remanded the MCDCA claim. The appellate

court concluded that CECP requires a creditor to disclose only

the interest rate charged, so failing to disclose a rate below

the maximum is not a violation for which liability is imposed.

Second, the appellate court concluded that the 60-day cure

period began when the assignee actually discovered the

violation, not when it took assignment of the contract. Third,

the appellate court concluded that the assignee provided

a proper cure notice because the notice is only required to

identify the substance of the error and not the actual violation.

Next, the appellate court concluded that a creditor does

not forfeit all interest when it cures because such a result

would discourage creditors from self-correcting the error. The

appellate court then held that a creditor could not be liable

for breach of contract due to a violation of CECP after a cure

because permitting liability would negate the effect of a cure.

Finally, the appellate court reversed the trial court’s decision

on the MCDCA claim because a reasonable jury could find

that the assignee’s conduct abused or harassed the buyer.

See Askew v. HRFC, LLC, 2016 U.S. App. LEXIS 384 (4th Cir.

(D. Md.) January 11, 2016).

Failure to Include Processing Fee Paid at Consummation

in Total of Payments Disclosure Did Not Violate TILA: After

selecting a used car for purchase for $17,000, the buyers paid

the dealer $2,400 down and paid an additional $4,675 the

following day. They financed the remaining $10,000 through

the dealer. When the buyers failed to make their payments

and keep the vehicle insured, the dealer repossessed it.

The buyers sued the dealer, alleging violations of the Truth

in Lending Act for failing to provide them with a disclosure

statement in a written form they could keep prior to the

extension of credit and for disclosing the total of payments as

$17,000 rather than $17,075, which was the amount shown

in the payment schedule. Both parties moved for summary

judgment, and the federal trial court granted the motion. The

court found that even if the dealer failed to give the buyers a

copy of the disclosure statement in a form they could keep,

that violation does not trigger statutory damages under

TILA, and the buyers failed to submit any evidence of actual

damages. The court also found that the dealer’s failure to

include the $75 processing fee in the total of payments did not

violate TILA. The court reasoned that the required disclosures

all relate to the amount of credit that is being extended (i.e.,

the amount financed), and the agreement clearly disclosed

that the $75 was a separate fee the buyers paid when they

signed the agreement. Note – be very careful with this one;

whether the court correctly decided the issue depends on

facts not evident in the court’s opinion. See Yancy v. America’s

Preowned Selection, 2016 U.S. Dist. LEXIS 13582 (E.D. Ark.

February 4, 2016).

Increasing Car’s Price to Cover Inflated Trade-In Allowance Not

Hidden Finance Charge Where Price Applied Equally to Cash

and Credit Transactions: A Pennsylvania dealership advertised

a “Cash for Clunkers” program promising potential buyers

“at least $4,500” for any car a buyer offered as a trade-in.

A buyer traded in his 1995 Jeep for a 2012 Ford with a cash

price of $29,214. The buyer sued the dealership, claiming,

among other things, that the dealership violated the Truth in

Lending Act and Regulation Z. The buyer argued that the price

of the Ford included a hidden finance charge represented by

the amount that the dealership marked up the Ford’s sale

price to make up for the fact that it gave the buyer more for

his trade-in than it was worth. The federal trial court dismissed

the TILA claim. Because the “Cash for Clunkers” offer applied

to both cash and credit sales, the court found that there was

no hidden finance charge. The fact that the buyer might have

been able to buy the Ford for a lower price if the deal did not

include the “clunker” trade-in was irrelevant. See Gregory v.

Metro Auto Sales, Inc., 2016 U.S. Dist. LEXIS 9993 (E.D. Pa.

January 27, 2016).

So there’s this month’s roundup! Stay legal, and we’ll see

you next month. 3

MIDATLANTIC DEALER NEWS APRIL 2016 | 29


KONTOS KOMMENTARY

CURRENT USED VEHICLE MARKET CONDITIONS

SUMMARY

Average wholesale used vehicle prices were down in February compared to January, which is

anomalous to the normal seasonal tendency as the spring tax refund season kicks in, and is

another indication that cumulative supply increases are continuing to cause prices to soften.

Tom Kontos is Executive

Vice-President, Customer

Strategies and Analytics.

In this position, Mr. Kontos

interfaces with members

of the media, Wall Street

and automotive analysts,

dealers, and key ADESA

clients to provide

information and insight

on economic trends in the

vehicle remarketing

industry, of which ADESA

is a major player. Mr.

Kontos also provides

analytical services to

internal and external

ADESA audiences in the

form of annual market

reports, periodic reports

on used vehicle price

trends, web-based

information products,

dealer surveys, and other

strategic studies. He

supplies monthly used

vehicle price data to the

U.S. Bureau of Economic

Analysis (BEA) as part

of the BEA’s effort to

estimate various

components of Gross

Domestic Product.

ADESA Auctions

13085 Hamilton Crossing

Blvd., Suite 500

Carmel, IN 46032

317.249.4235

tkontos@adesa.com

DETAILS

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices

by Vehicle Model Class 1 , wholesale used vehicle prices in February averaged $10,202 – down

0.5% compared to January but up a modest 0.3% relative to February 2015. Cars and Minivans

continue to show year-over-year price declines, while SUVs/Crossovers and Pickups show

gains (ADESA Analytical Services’ Black Book-based segmentation scheme has been revised

to combine crossovers into the SUV classes, as the distinction between them has blurred).

Average wholesale prices for used vehicles remarketed by manufacturers were down 0.5%

month-over-month but up 1.6% year-over-year. Prices for fleet/lease consignors were down

2.0% sequentially and down 1.8% annually, as fleet/lease sales volumes rose significantly

versus prior year partly as a result of higher off-lease volumes. Dealer consignors saw a 0.5%

price decrease versus January but a 3.2% increase relative to February 2015.

Data from NADA showed an 11.9% year-over-year increase in retail used vehicle sales by

franchised dealers and a 15.5% increase for independent dealers in February, but both were

down significantly on a month-over-month basis for the second month in a row. February CPO

sales were up 10.8% month-over-month and 7.1% year-over-year, more than making up for

January’s declines, according to figures from Autodata.

WHOLESALE USED VEHICLE PRICE TRENDS

Average Prices ($/Unit)

Latest Month Versus:

Feb-16 Jan-16 Feb-15 Prior Month Prior Year

Total All Vehicles $10,202 $10,254 $10,167 -0.5% 0.3%

Total Cars $8,506 $8,535 $9,074 -0.3% -6.3%

Compact Car $6,650 $6,531 $7,271 1.8% -8.5%

Midsize Car $7,667 $7,742 $8,100 -1.0% -5.3%

Fullsize Car $7,378 $7,485 $8,027 -1.4% -8.1%

Luxury Car $12,899 $12,858 $13,493 0.3% -4.4%

Sporty Car $12,893 $12,730 $12,693 1.3% 1.6%

Total Trucks $12,030 $12,093 $11,409 -0.5% 5.4%

Mini Van $7,262 $7,141 $7,888 1.7% -7.9%

Fullsize Van $12,429 $12,120 $12,155 2.6% 2.3%

Compact SUV/CUV $10,615 $10,568 $10,542 0.4% 0.7%

Midsize SUV/CUV $10,663 $10,758 $10,047 -0.9% 6.1%

Fullsize SUV/CUV $12,107 $12,265 $11,422 -1.3% 6.0%

Luxury SUV/CUV $17,758 $17,923 $17,719 -0.9% 0.2%

Compact Pickup $8,370 $8,268 $7,683 1.2% 8.9%

Fullsize Pickup $15,298 $15,209 $13,777 0.6% 11.0%

Source: ADESA Analytical Services. January revised.

NOTE: Blackbook revised segmentation to combine crossovers into the SUV classes as the distinction between them has blurred.

1

The analysis is based on over seven million annual sales transactions from over 150 of the largest U.S. wholesale auto auctions, including those of

ADESA as well as other auction companies. ADESA Analytical Services segregates these transactions to study trends by vehicle model class, sale type,

model year, etc.

The views and analysis provided herein relate to the vehicle remarketing industry as a whole and may not relate directly to KAR Auction Services, Inc. The

views and analysis are not the views of KAR Auction Services, its management or its subsidiaries; and their accuracy is not warranted. The statements

contained in this report and statements that the company may make orally in connection with this report that are not historical facts are forward-looking

statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “bode”, “promises”,

“likely to” and similar expressions identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause

actual results to differ materially from the results projected, expressed or implied by the forward-looking statements. Factors that could cause or contribute

to such differences include those matters disclosed in the company’s Securities and Exchange Commission filings. The company does not undertake any

obligation to update any forward-looking statements.

30 | APRIL 2016 MIDATLANTIC DEALER NEWS

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