OADA NEWS - Ohio Automobile Dealers Association
Transcription
OADA NEWS - Ohio Automobile Dealers Association
OADA NEWS The Ohio Automobile Dealers Association’s Monthly Newsletter August 2016 OADA Town Hall Meetings Recap IN THIS ISSUE Over the past two months, OADA President Zach Doran and team traveled the state conducting Town Hall meetings. The purpose of the Town Hall meetings was to address various issues impacting OADA Members directly including current legislation, legal and regulatory issues, and to answer any questions while getting to reconnect with members outside of the larger Ohio metro areas. Along with the legislative discussion, the OADA team was able to expand upon the member services. Special guest speakers during the Town Hall Meetings included 6 state legislators and a House of Representatives candidate. 1 Town Hall Meetings Recap Announcing Next Gen Racing Day! 2 FTC Increases Maximum Civil Penalties Effective August 1 Nominations Open for 2017 TIME Dealer of the Year The Town Hall meetings took OADA to 8 different cities, logged over 1,600 miles on the highway, and the OADA team met with 115 members. In Memory of Arline Lavery 3 Ohio Family Trust Company Act We look forward to hosting more town hall meetings around the state in the coming years! < OADA Services: Custom Water 4 Understanding a Dealer’s Options with Abandoned Vehicles 5 2017 OADA Convention Ad Review: FTC Announces Consent Order with Ohio Dealership 6 True-Up Deadline is August 15! How to Write an Accurate, Compelling Job Posting 7 Leveling the Playing Field: Retail Warranty Reimbursement 8 NADA News: YES! Franchise Laws Lower Prices and Benefit Consumers 9 Automotive News 40 Under 40 List Includes 3 Ohio Honorees Top Legal Reminders for August 10 Safety Corner: First Aid Kits Back to School Customer Incentives 11 Next Gen Racing Day Registration 12 Webinar: Succession Planning 13 Webinar: Retail Warranty Reimbursement 14 Webinar: Hiring 101 One of the the 8 OADA Town Hall Meetings was held in Warren, Ohio on July 20 at R.D. Banks Chevrolet. The dealership is owned by 2016 OADA Chairman Russ Banks and OADA is grateful to Russ for extending his hospitality to host the event. Pictured to the left are some of OADA’s staff with OADA Chairman Russ Banks and his daughter Jennifer and son Rusty. Announcing Next Gen Racing Day! Start your engines for the 4th Annual Next Gen Racing Day on Thursday, September 15 at Grand Prix Karting in Columbus. Registration is filling up FAST for this exciting day of head-tohead racing. Next Gens, send in the registration form found on Page 11 of this newsletter to confirm your spot to develop your peer network while zooming around the largest indoor supertrack in the United States! If you are a dealer and have a Next Gen in your dealership, make sure they see get this form so they don’t miss out on the chance to join Racing Day! < Page 1 Publisher: Zach Doran Editor: Marie Gilman All Rights Reserved FTC Increases Maximum Civil Penalties Effective August 1 Nominations Open for 2017 TIME Dealer of the Year provided by Stockamp & Brown by Deanna Stockamp & Jessica Beeman The potential civil penalties for violating laws enforced by the Federal Trade Commission just went up, in some cases by 150%! On November 2, 2015, President Obama signed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (The Improvements Act) into law. The Improvements Act requires several federal agencies, including the Federal Trade Commission (the FTC), to adjust civil penalty amounts for violations of the laws they enforce; its purpose is to improve the effectiveness of monetary penalties and to maintain their deterrent effect. Now facing potential civil penalties of up to $40,000 per day, per violation for engaging in deceptive acts or practices, dealers need to be more diligent that ever about their compliance efforts. will consider when determining the propriety of a penalty waiver or reduction for small businesses that are not in compliance with the law. However, any civil penalty imposed per violation for each day that the violation occurs can add up quickly. And, given the fact that the maximum penalties available under the FTC Act have more than doubled, the civil penalties imposed going forward will likely far exceed what we have seen in the past. For example, if the FTC determines that an advertisement posted on a dealer’s website for 30 days violates just one provision of the FTC Act, it could assess a civil penalty of up to $1.2 million. The initial increase of penalty amounts for 2016 was determined using a “catch-up” inflation method specified by Congress. At the end of June, the FTC announced the changes to its Rule 1.98 to reflect the new maximum civil penalties that will be assessed under 16 laws for which it has enforcement authority. Effective August 1, 2016, the penalty amounts that may be imposed under industry-related laws enforced by the FTC will be as follows: Keep in mind as well that the FTC rarely asserts just one violation in a complaint. The FTC Act includes an extremely broad list of deceptive acts and practices that potentially covers every aspect of a motor vehicle transaction, from the advertisement of a vehicle to the closing of the finance transaction, and multiple violations are more likely to be identified than not. Most recently, the FTC’s enforcement activities have focused on advertising violations, representations related to the benefits and pricing of add-on products, and violations of the Used Car Rule. More specific examples of potential violations of the FTC Act include: • Section 5 of the FTC Act: Addresses unfair or deceptive acts or practices - Increase from $16,000 to $40,000 per violation. • Misrepresenting or failing to include credit disclosures required under Regulations Z or M in advertisements; • Section 5(l) of the FTC Act: Governs violations of cease and desist orders issued under the FTC Act - Increase from $16,000 to $40,000. • Advertising prices, dealer discounts, rebates, and/or incentives as generally available to consumers, when in fact they are limited to a select group of consumers; • Section 621(a)(2) of the Fair Credit Reporting Act (FCRA): Governs knowing violations of the FCRA - Increase from $3,500 to $3,756. • Implying that a used vehicle is “safe” by advertising that it qualifies for a “certified limited warranty” or that a multipoint inspection has been performed when there is an open safety recall; It’s true that these new amounts reflect the maximum civil penalties permitted by law and the FTC typically does not impose the maximum penalties for first offenses. The FTC even noted in its announcement that it will take into account the following factors: the degree of culpability, any history of prior such conduct, ability to pay, and effect on ability to continue to do business. There is also a civil penalty leniency program for small businesses with specific criteria that the FTC • Misrepresenting the price of add-on products or failing to disclose that they are optional; • Advertising that consumers must meet a certain credit score to qualify for an offer without disclosing that a majority of consumers are not likely to meet the stated FTC Increases Penalties Page 2 continued on Page 7 Ally Financial and TIME Magazine recently announced that nominations are now being accepted for the 2017 TIME Dealer of the Year Award Program. A panel composed of faculty from The Tauber Institute for Global Operations at the University of Michigan will choose a 2017 finalist from among the nominees in each of the four National Automobile Dealers Association (NADA) regions. From those four finalists, the judges will select the 48th annual national winner who will be named the 2017 TIME Dealer of the Year at the NADA Annual Convention in New Orleans, Louisiana on January 27, 2017. A TIME nominee must be a member of NADA and OADA for at least five years. The individual should spend at least 60% of his/her time involved in dealership affairs. OADA encourages every member to think about the ideal candidate who can proudly represent Ohio for this prestigious award. Visit www.timedealeroftheyear.com to find out more about the TIME Dealer of the Year Award Program. Please submit a written statement of the qualifications of any nominee you would like OADA to consider. Brief biographical information would be helpful as well. Mail information on your nominee by FRIDAY, AUGUST 12 to: OADA Attention: Zach Doran 655 Metro Place South, Suite 270 Dublin, Ohio 43017 < In Memory of Arline Lavery OADA sends our condolences to the Lavery family after the passing of Arline Lavery on Tuesday, July 26. She was 91 years old. Arline, alongside her late husband Tom Lavery, founded Lavery Chevrolet, Inc. in Alliance, Ohio in 1966. Both Tom and their son Bill Lavery have served as past OADA Chairmen, in 1977 and 2014 respectively. Bill remains a very active member of OADA and is the owner of Lavery Automotive Sales & Service. Arline was very involved in the community and was a loving wife, mother, and grandmother. She will be greatly missed. < Ohio Family Trust Company Act provided by Schneider Downs On June 14, 2016, Ohio Governor John Kasich signed the Ohio Family Trust Company Act (the “Act”) into law to be effective September 14, 2106. With the passage of the Act, Ohio is now among the growing list of states that authorize a family to establish a state-chartered family trust company (“FTC”) to provide trust and fiduciary services to the family group. Under prior law, Ohio families wishing to avail themselves of the benefits of an FTC could only do so if they accepted the additional costs and administrative burdens of operating in another state. The new law permits a family trust company to operate in either licensed form or non-licensed form, and a licensed FTC must meet a series of statutory requirements. First, a licensed FTC must have a minimum capital balance of at least $200,000, which may be increased up to $500,000 in the discretion of the State. In addition, a licensed Ohio FTC must maintain an office and at least one parttime employee in Ohio, and must hold certain meetings and perform certain administrative functions in Ohio. The FTC must also maintain $1 million worth of liability insurance and is subject to periodic audits by the State. A non-licensed FTC is generally not subject to the above requirements, but must file an annual affidavit with the State verifying that the FTC is eligible to transact business as an Ohio unlicensed FTC. An FTC that is not licensed may only provide fiduciary services to “family members.” The term “family members” is defined as a class of individuals, all of whom have a common ancestor who is not more than ten generations removed. This common ancestor is known as the “designated relative” and must be identified at the inception of the FTC, and can never be changed. Family members also include spouses, lineal descendants (including adopted children) and their spouses, and certain trusts. An FTC that is licensed may provide fiduciary services to family members and also to a limited class of non-family mem- Page 3 bers and affiliated entities. No FTC may provide fiduciary services to the general public. Due to an increasingly friendly legislative landscape, more and more wealthy individuals and families are choosing to set up FTCs rather than using traditional trust companies. Families establish FTCs for a number of reasons, including a desire for greater family control, privacy and flexibility. Ohio families who may have considered an FTC but did not wish to subject themselves to the unfamiliar law of another state have a new option at their disposal. Nonetheless, the Act’s provisions regarding the formation and regulation of FTCs are extremely complex, and it is recommended that families considering an FTC seek professional advice. For more information on this topic, please contact either Greg L. Allison, CPA, Esq. of Schneider Downs & Co., Inc. at (412) 697-5341 or Melanie M. LaSota, CPA, Esq. of Schneider Downs & Co., Inc. at (614) 586-7020. < Understanding a Dealer’s Options with Abandoned Vehicles by Kevin Shoemaker, Vice President of Legal Affairs & Matt Chacey, Staff Counsel Walking through the Abandoned Vehicle Title Process Every dealer has encountered the same problem, a consumer has asked them to make repairs to their vehicle and when it is time to pick up the vehicle and pay for the repairs, the consumer disappears and is never heard from again. The vehicle ends up sitting on your lot taking valuable space just waiting for the consumer to decide if he or she wants to retrieve their vehicle. The question we frequently get is whether or not dealers have any options to help assist them in combating this problem. The best option available to dealers is the Abandoned Vehicle Title process outlined in R.C. § 4505.101. Step # 1: Determine the Value of the Vehicle Before you even begin this process, you have to make sure that the vehicle will be eligible to transfer the title through this law. Under Ohio law, the value of the vehicle must be less than $3,500.00. In order to calculate the vehicle’s value, you look to an independent vehicle valuation guide, such as KBB or NADA, and determine the wholesale market value of the vehicle. Once you have determined the wholesale market value, you subtract the cost of any agreed upon repairs or diagnostic charges. If applicable, you subtract any estimated costs of repairs to restore the vehicle to wholesale value. Once you subtract those amounts from the wholesale market value, you have determined the “Vehicle Value”. That number has to be below $3,500 in order to qualify for the title transfer under this process. The Deputy Clerk will require that you substantiate all of these figures with supporting evidence, such as valuation reports, repair estimates, repair orders signed by the consumer, and any other necessary paperwork, so make sure to include those in your submission. Step # 2: Search the Vehicle’s Title History and Request a Certified Copy The BMV requires that you provide your local Title Registrar a certified copy of the vehicle’s Title Record when you submit your Affidavit. Unfortunately, simply printing out a copy of the online database is not going to be enough for the BMV, you will need a certified copy. In or- der to obtain a certified copy, a dealer needs to complete Form 1173 and submit it to the BMV. You can find this form at www.bmv.ohio. gov/forms-numerical.aspx. This could take 5-10 days for the BMV to process, so complete the process as soon as you can. you send for your records as well as the green return receipt. The local Title Clerk may require a copy be submitted with the affidavit. The title history report gives you the names and addresses of both the title holder as well as any lienholders, which will be important for the next step. If the title holder or lienholder fail to respond to the letter within 15 days of mailing the notice outlined in Step # 3 (as determined by the date the post office receives the letter), the dealer has the right to file the Affidavit and all supporting material with the BMV to transfer the title to the dealership. The Affidavit is BMV Form 4202. You can find the affidavit at www.bmv.ohio.gov/forms-titles.aspx. Step # 3: Send the Consumer and any Lien Holder a Notice of Your Intent Once the requested repairs or diagnostic inspection has been completed and you have given the consumer notice that the vehicle is ready for them to pick up, they have 15-days to pick up the car and pay off the balance owed before you can take any action. If they fail to pick it up within those 15-days, then you have to send a notice to any title holders and any lienholder giving them notice that the vehicle has not been picked up and that there is an outstanding balance owed. The statute only requires that two pieces of information be included in the notice for the lienholder, but we encourage your letter to have the following information: • That the consumer has failed to pick up the car; • The date the car was ready for the consumer to pick up; • The outstanding balance owed to the dealership for the agreed repairs; • The wholesale value of the vehicle; • Any applicable storage fee (unless already communicated); • The current location of the vehicle; • That they have 15 days from the date of this letter to make arrangements to pay the outstanding balance and take the vehicle; and • That if the consumer and/or lienholder fails to collect the vehicle and pay off the balance owed, you will take action that results in them losing title to the vehicle and any liens would be held invalid. Please remember that this letter must be sent to any title holder or lienholder by certified mail return receipt requested. You should keep a copy of any certified letter Page 4 Step # 4: Complete the Affidavit and submit it to your local Title Registrar A business owner or authorized agent has to sign the affidavit on behalf of the dealership. In the absence of a clear policy of who has authority to sign on behalf of the dealership, we encourage the dealer principal sign on behalf of the dealership. Remember that this document has to be signed in the presence of a Notary. Also, one important thing to note, the Deputy Clerk is going to ask you to give them a check for the Vehicle Value (see Page # 1 for calculation). The theory behind this is that the dealership should not be able to profit from this type of transaction and as such you are only going to be compensated for the costs involved in getting the vehicle ready for sale. Any excess funds will go to the county’s general fund and you will advance those costs at the time you file the application. Once you submit the Affidavit with the supporting documentation, the Deputy Clerk will process the transfer of title and invalidate any active liens on the vehicle. Once you get title, the vehicle is yours to do with it what you need to get it off your lot. Alternative Option to the Abandoned Title Process If the unclaimed vehicle’s title cannot be transferred under the Abandoned Vehicle statute, you can still pursue an execution action with an Artisan Lien against the title holder. Simply having an Artisan Lien will not be sufficient to try to take title, you will have to initiate legal action in order to collect. If you do have to take legal action, make sure that the consumer is the actual title holder of the vehicle. Remember, that in order to maintain a priority lien, a dealer has to mainAbandoned Vehicles continued on Page 8 Registration Now Open for the 84th Annual Convention! April 21 - 24, 2017 at OADA Convention April 21-24, 2017 The Greenbrier White Sulphur Springs, WV The Convention package includes: 4 days, 3 nights at The Greenbrier 2 general business sessions (speakers TBA) Afternoon breakout sessions 3 breakfasts Welcome reception & dinner Cocktails & dessert reception Cocktail reception & farewell dinner OADA has a fantastic group rate starting at $259 per night (includes taxes & resort fees) which will be honored for 3 days prior to & 3 days at the conclusion of the Convention. Register online at WWW.OADA.COM Contact Kelly Danison at 614.923.2228 or kdanison@oada.com with any questions. FTC Announces Consent Order with Ohio Dealership by the FTC. The dealer will be required to have a copy of all advertisements available for FTC inspection for a period of five years from the last date of dissemination. The Federal Trade Commission (“FTC”) recently published a consent order with an Ohio dealership related to alleged advertising violations. The FTC claims that the dealership’s advertising failed to properly disclose credit score requirements and whether or not tax, title, and fees were included in the offer. The dealership cooperated in the investigation, admitted no wrong-doing, and was not fined. This consent order will be in place for twenty years from date of the order or any subsequent violations. As a result of this consent order, the Ohio dealer will be under higher scrutiny and the dealer’s advertising will be regularly reviewed “with approved credit”? • Include a triggering term that would require specific information be disclosed? With the growth of online and digital advertising, federal and state regulators have the ability to review dealer’s advertising in easily accessible formats and mediums. With the barriers to reviewing dealer’s advertising so low, we are seeing a growing number of FTC advertising complaints against dealers. Dealers need to be cognizant about the reality of an FTC or Ohio Attorney General complaint being filed against them and the ramifications of those complaints. • Include material terms, limitations, and exclusions? The FTC’s announcement should be a reminder to every dealer that the FTC as well as the Ohio Attorney General’s Office is out there regularly reviewing print ads, television commercials, dealership websites, and internet ads for compliance. Every dealer needs to review their advertisements carefully to ensure they are compliant with both federal and state laws. For example, does your ad: • http://www.ohioattorneygeneral.gov/ Files/Publications-Files/Publications-forBusiness/Guidelines-for-Motor-VehicleAdvertising-%28PDF%29.aspx • Utilize a layout that is easily read and understood? There are several informative publications that can help you educate your marketing team and assist you in evaluating your advertisements for compliance with both Ohio and federal law. Some good resources to help you with advertising review include: • https://www.ftc.gov/tips-advice/businesscenter/guidance/advertising-consumerleases • Comply with Reg. M requirements? • https://www.ftc.gov/sites/default/files/ attachments/press-releases/ftc-staffrevises-online-advertising-disclosure-gui delines/130312dotcomdisclosures.pdf • Include a statement that all offers are • https://www.nada.org/advertisingguide/ < • Comply with Reg. Z requirements? Page 5 True-Up Deadline is August 15, 2016! Do NOT Miss This Deadline! provided by CareWorksComp UPDATE! The first-ever payroll True-up period for private employers begins July 1, 2016. Payroll true-up reports are due to BWC no later than Aug. 15, 2016. At the end of each private employer policy period (July), it is necessary to reconcile estimated payroll with actual payroll. This is called the True-up. This report can be completed online at: http://ow.ly/4mWUlm or over the phone by calling 1 (800) 644-6292. How to Write an Accurate, Compelling Job Posting that Gets You Candidates You Crave provided by CareerCo by Maryellen Adams, Director of Association Partnerships If you haven’t been impressed with the caliber of candidates that have been inquiring about your dealership’s jobs, the first thing you should do is evaluate your job postings. Don’t believe it? Just try scrolling through a job board and reading some of the generic, boring, and uninspiring listings that are out there. It’s not easy to spot the ones that you would apply to versus those that sound awful. If your offerings sound mundane, lackluster, or offputting in some way, job seekers will quickly move on to the next posting. This new payroll True-up process is part of prospective billing, and as a result, Ohio businesses are now required to reconcile their actual payroll annually for the prior policy year and also reconcile any differences in premium paid. According to BWC, the True-up allows more accurate premium calculation. Even if actual payroll for the year matches the original BWC estimate or a business had zero payroll, the True-up report must be completed. In order to attract quality candidates, you’ll need to craft a compelling job posting that captures their attention, provides ample details about the position, and describes why your dealership is a great place to work. And, you have to do this working in keywords that will help your listing show up in search results while not getting too long-winded in detail. It sounds complicated, but it’s totally doable. The quickest and easiest way to True-up is online with a BWC e-account. If you do not have a BWC e-account you can create one by signing on to: https://www.bwc.ohio.gov/ SelfSvcAccountAdmin/newacc.asp. 1. Start with a simple job title. You can also complete the True-up through the BWC call center however wait times may be extremely high, as a result BWC encourages the use of their online reporting system. IMPORTANT NOTE: Again, August 15, 2016 is the due date for your True-up report to be completed with BWC. This is a critical deadline, as the BWC has indicated that if a business does not complete the True-up timely, they may not be eligible for current, and future alternative rating and premium discount programs such as Group Rating and Group Retrospective Rating. Once more, reports must be submitted either online at (http://ow.ly/4mWUlm) or by phone at (800) 644.6292. Below are a couple of youtube video links that you may find helpful in the process: https://youtu.be/dmYEtuGLEnQ https://youtu.be/YMaslG0eq-M < Here’s how to get the job posting job done: While it might feel whimsical and trendy to put out a call for a “technology guru” or “social media ninja,” the job title isn’t the place to get creative. Stick with a well-recognized job title to start since that’s the primary way your listing will be searched for and found by job seekers. Instead, if what you are actually looking for an experienced, tech-savvy Delivery Consultant, be clear in the title. Otherwise, you will attract the wrong applicants and waste valuable time sifting through piles of candidates that aren’t the right fit. 2. Give lots of job opening details. Before anyone will want to apply for your position, you’ll need to explain briefly what the job entails. To attract the right person for the position, describe your ideal candidate. Detail the responsibilities, along with the attributes needed to succeed. Try not to make the qualifications too rigid or you could be shutting out potentially awesome applicants. For example, if you are searching for a great Parts Manager, chances are that a candidate with five years of dealership Parts Management experience can do the job equally as well as someone with ten years of experience. While it is understandable that you want the best candidate Page 6 you can find, setting unrealistic expectations will eliminate potentially good applicants and greatly increase your time to hire. 3. Now, get funky with your job description. You’ve described the job, now is your chance to sell your dealership as a great employer and have some fun with it! Be employee-focused. Highlight any unique perks, discuss your cool, modern, state of the art facilities and mention any industry-leading facts or stats. If you have recently been named a “best place to work,” flaunt it! What you don’t want to include here is a whole lot of jargon or clichés about being “a team-oriented environment that nurtures its greatest assets.” Instead, let job seekers get a sense of the passion that is the lifeblood of your company. And, although it should go without saying; be genuine. Never misrepresent the opportunity or overstate the earning potential just to get candidates in the door. Job seekers will see right through any fabrications, or may end up feeling misled once they go further into the hiring process. 4. Make sure your job listing is inviting and provides a call to action. Hopefully by now you’ve intrigued some quality job candidates, so be sure to tell them what the next step is. Map out how you’d like them to apply, and give them a point of contact in case they have any questions. And never direct them to a fax number (Can you say outdated?). Job seekers will no doubt find it inconvenient to have to fax over their resume. While dealerships don’t necessarily need an applicant tracking system, you should at least have a generic email address that accepts job seeker correspondence. Also, be specific if you’d like them to include any additional information or references. Getting what you want up front will avoid timewasting back and forth later on. If you’re not sure how to approach your next job posting, one thing you can do is check out how others in the industry post similar positions. Which ones would speak to you if you were the job seeker? Which dealerships sound appealing and exciting? Those are the postings that you should try to emulate, while being sure to add that little bit of uniqueness that only your dealership can offer. Once you get the formula down, the applications will start rolling in! < Leveling the Playing Field: Retail Warranty Reimbursement provided by Armada Dealer Solutions by Joe Jankowski, Managing Partner The factory-dealer relationship is anything but a level playing field, and unfortunately the behaviors of some manufacturers have necessitated state laws to protect dealers. These laws cover a myriad of issues, but one that is critical to your bottom line exists in 39 states, with more on the way. For years most dealers have submitted for annual increases to their warranty labor rate, but have been stuck with an artificially low parts mark-up stipulated in their dealer agreements. This mark-up is typically 40% over cost, although some manufacturers will pay you list or MSRP. By the way, don’t be fooled by the “list” claim you may hear; you are not collecting 67%, which is anecdotally thrown around by your factory rep, or by your managers – you are actually being paid a mark-up in the low to mid 50s. Based on favorable state laws, you are entitled to collect “retail” from your manufacturer for parts used in a warranty claim. No, retail is NOT list price or MSRP; in most cases it is clearly defined in the law. Basically, retail is what your customers pay you for a warrantylike repair. In a store with typical pricing and discounting practices, the mark-up normally falls in the 75% to 85% range. For dealers utilizing a list pricing model, you should expect something in the 60% range. So even in a conservative pricing environment, a dealer should expect to improve his warranty gross profit by 50%; however, something on the order of doubling the gross is very realistic. This is a one-time process, and does not need to be repeated, unless you materially change your parts pricing strategy. FTC Increases Penalties This is not to say that the manufacturer will simply lie down and grant you a 100% improvement in your gross. First of all, the laws mandate a submission, and detail what is required of the dealer, but that’s just the beginning. Several things need to be considered in order to ensure the best possible result: Thorough understanding of the law – Rest assured certain manufacturers will read the statute differently from you. Sometimes the positions they take are rather shocking, including those that will simply refuse to follow the law, or others that will attempt to include non-warranty-like repairs in a deliberate attempt to lower your mark-up. Following the manufacturer’s protocol – It’s critical to understand the factory’s guidelines for the inclusion or exclusion of various aspects of the submission; each of them has different rules, and they typically won’t disclose them to you. If you can determine what they are, you should follow them within reason; do not be combative, or send up “legal signals” out of the gate. Optimization - Absolutely key to this process is achieving the best possible result, and that can only be done through the proper selection of your submission sample – this is something that should not be left to chance or inferior technologies. Missing your markup by even a few points can cost you thousands every year, perpetually. Do yourself a favor, and explore this aspect with some attention to detail – it will be worth it to you in the long run. Warranty Auditors - Beyond technology, however, is the need for a thorough audit process. Your declaration will be scrutinized by factory auditors that know every nook and cranny of countering retail warranty submissions, and you should have someone familiar with their techniques, in order to refute their sometimes questionable positions. Here again, it is better to get along with these folks, and in many cases, this is not a problem; however, without naming any manufacturers, some are extremely difficult. Factory Responses – In many cases your approval will not be smooth, and the manufacturer may rebut your calculations, or in some instances, summarily reject your submission. Responding in the proper manner is critically important, since it could be the difference between achieving a substantial increase in your warranty parts gross, or obtaining nothing at all. There are many dealers that have submitted two, three or four times over the course of a year or two, costing themselves multiple six figures in lost profit. The bottom line is that you have an extraordinary opportunity to receive a fair reimbursement for the parts utilized in the warranty work you perform. If this process is approached in a judicious and professional manner, you can quite possibly double your warranty parts gross profit. There are many pitfalls for the uninformed, but tremendous upside for those that perform the submission process properly. For more information, contact Armada at (888) 259-4471 or e-mail info@dealeruplift. com. You can also visit their website at www. dealeruplit.com. Armada has performed over 1,800 successful retail warranty submissions to 24 manufacturers in 39 states. < credit score; • Failing to display or properly complete the Used Car Buyer’s Guide; • Failing to disclose material information regarding biweekly payment plans; and • Misrepresenting practices related to collecting, sharing and/or safeguarding consumer information. In addition to the civil penalty, the FTC can also seek additional amounts for consumer redress, costs and fees, and even criminal penalties by referral of the matter to the Department of Justice. Moreover, the FTC will continue to adjust the penalty amounts for inflation annually as required by The Improvements Act. So, if you want to minimize your Dealership’s potential legal exposure, keeping apprised of legal and regulatory developments, taking steps to ensure that your Dealership’s advertisements, paperwork and day-to-day sales and business Page 7 continued from Page 2 activities are in compliance with the law, and training Dealership employees on an ongoing basis are a must. Deanna is a partner and Jessica is an associate with the law firm of Stockamp & Brown, LLC. The firm serves as outside counsel to OADA. Please do not hesitate to contact Deanna with any questions at (614) 761-0400 or by e-mail at dstockamp@stockampbrown.com. < NADA News: YES! State Franchise Laws Lower Prices and Benefit Consumers Excerpt from NADA Chairman’s Column A new economic report from the Phoenix Center for Advanced Legal and Economic Public Policy Studies makes one overriding conclusion: state auto franchise laws lower retail prices of new cars, which benefits consumers. The study, “State Automobile Franchise Laws: Public or Private Interests?” was released in July after years of debate and speculation about the benefits of the dealer franchise network. Professor T. Randolph Beard and Dr. George S. Ford, authors of the study, found that franchise laws do not limit competition or lead to higher prices. Quite the opposite, they found that “all the evidence suggests there is intense competition leading to very low margins on new car sales.” This, in turn, demonstrably lowers prices for consumers and alters the way they buy cars and service in a very positive way. And how does the dealer network compare to manufacturers? Dr. Ford reports that when selling an automobile-service bundle, the analysis indicated that “franchised auto dealers have a better incentive with respect to consumer desires than car manufacturers.” Thus, it makes sense that state legislatures choose a market design that best fits their constituents. Rhett Ricart, Ohio NADA Director This latest report reaffirms the messages that the National Automobile Dealers Association—and auto dealers nationwide—have been espousing: the car-buying public is better served with our services than without. or more than 100 years, car buyers have been relying on a system that delivers the most efficient and cost-effective way of buying a car— through franchised dealers. Automakers contract with dealers because we incur billions of dollars in expenses for equipment and facilities; we deliver in-person customer service you cannot get through a computer screen; and we reduce consumer costs through a competitive model that lowers retail prices and makes purchasing possible through dealer-assisted financing. This latest report is also consistent with what respected auto analyst Maryann Keller reported at a Federal Trade Commission panel earlier this year. She cited empirical evidence showing that intra-brand competition among dealers significantly lowers new-car prices. A direct-sales model would not benefit consumers in the same way. Moreover, the franchise network also promotes public safety and instills confidence in the consumer that there is someone there to help service the vehicle when needed. State governments require dealers to invest in facilities so that help is available to car owners throughout the life of the vehicle, and not just at the point of sale. As regulators such as the Federal Trade Commission continue to probe the benefits of the franchise system, we urge them to remember that the franchise laws in place not only promote competition in the free market but public safety for all. And YES, that is a win-win for consumers and dealers alike. Visit nada.org/getthefacts to learn more about the benefits of the dealer franchise system. < Abandoned Vehicles tain possession of the vehicle. After talking with several dealers about these situations, each of them have given our office some great pieces of advice for how to handle or these situations. • Don’t let lienholders tell you that they don’t have to pay any outstanding balance. The law states that if the lienholder fails to comply and pay off any balance imposed, that the lien will be invalid upon transfer to the dealership. With that said, you should consider whether or not lowering your prices, particularly with storage fees, might be a good idea to get the vehicle off your lot and resolve the matter. This is ultimately a business decision for your dealership; • Once you send out the notices, make sure you take some action to protect the vehicle from being taken. Some individuals wait until you send the notice because they believe you have stopped paying attention to the vehicle. Once they have taken possession of the vehicle, it makes it even more difficult to collect on any outstanding balance; • Remember that these titles are processed by the individual county Clerks and as such they may have stricter policies (e.g. the wholesale value of the vehicle must be determined by a specific industry valuation guide). We strongly encourage you to consult with your local County Clerk of Courts, Title Division office on any additional requirements they may have. OADA strongly advises that you consult with your legal counsel before you take any action in getting title through an Artisan Lien. Some Practical Considerations Page 8 continued from Page 4 • Adding language to your Repair Order’s disclosures that briefly outlines this process and the potential ramifications. It should be noted that there is pending legislation before the Ohio Legislature that would change some of the suggestions or details of this article. If and/or when that Bill becomes law, OADA will notify dealers of those changes and how they impact the application process. If you have any additional questions or concerns regarding this information, or the abandoned vehicle title process, please contact Matt Chacey, OADA Staff Counsel at (614) 923-2232 or mchacey@oada.com. This article is intended for general use only and should not be considered as legal advice. All dealers are strongly encouraged to consult with their dealership’s counsel prior to implementing any dealership process. < Automotive News 40 Under 40 List Includes 3 Ohio Honorees OADA wishes to congratulate 3 honorees from Ohio that have been named to the Automotive News 40 Under 40! It takes a lot to succeed in the industry, and being named to this list proves that they are really making their mark. Heather Wagener (27) holds a position as General Service Manager of Acura Columbus in Dublin. With family in the business, she started young, serving as a cashier in service and answering phones. She also worked in the parts and sales departments before being hired into her current role. She had planned to be a teacher, but now instead has a goal of one day owning a dealership. Heather’s success is highly attributed to her understanding of both her employees and customers. When taking on the general service manager role in 2014, she noticed a lack of communication among departments, managers, and employees was impacting customer satisfaction scores. So, Heather instituted a weekly meeting on Mondays to get the department heads and managers all on the same page. It allows everyone to speak their mind and address is- sues. There is now a stronger camaraderie among the staff and Acura Columbus’ customer satisfaction is now at an 85.3%! Anthony Ries (27) serves as Vice President of Sales at Bernie Moreno Companies in North Olmstead. He started out working a “part time” job as a dealership sales consultant while he was a full-time student at the University of Akron in order to pay tuition bills. With a goal of heading to law school after law school, plans quickly changed once he had graduated magna cum laude in 2012. He then met the “electrifying” Bernie Moreno, who after discovering their many shared ideas about how to run a dealership dispatched Anthony after only 4 months of his initial hire to a position as general manager of a moneylosing Buick GMC dealership in Beachwood. Anthony quickly turned the store around. By the end of the year, the dealerships old inventory of at least 3 model years was cleared out. In 2015, the new-vehicle sales were up 55% from the previous year. They went from one of the bottom 10 Buick GMC dealers in Ohio to one of the fastest growing in the Mid- west under those franchises. Shujaat Siddiqui (37) is the General Manager of Dave Walter BMW in Akron. On his list of achievements is their location being rated the number 1 U.S, dealership by BMW of North America in 2015, based on 15 key performance indicators plus customer satisfaction scores. The dealership embraced online selling which enabled them to outperform larger dealerships in more affluent markets. Shujaat said the key to his success with this was “the fact that I had my whole new-car inventory listed with an exact lease payment.” The result: lease penetration at Dave Walter BWM is around 70% of new-car sales, high even by BMW standards. Shujaat believes in hiring the right people and working with customers in an efficient way. Maintaining a small sales staff only 4 salespeople, Dave Walter BMW sold 1,289 vehicles in 2015. Read more about the stories of success for all of the 40 Under 40 here on Automotive News at http://www.autonews.com/section/ underforty02! < Top Legal Reminders for August 1. CAT Tax Quarter 2 Filing Deadline: As a reminder, the 2016 second quarter Commercial Activities and Transactions Tax (“CAT Tax”) return is due on August 10, 2016. Dealers can file electronically through Ohio Business Gateway or through the ODT’s TeleFile system. 2. Disclosing Material Issues in a Used Vehicle Transaction: When a dealership offers a used vehicle for sale, the dealership may have a duty to disclose certain issues even if the vehicle is sold “As-Is”. While there is no clear rule that outlines what disclosures must be made, a dealer who knows or reasonably should have known of a material problem or issue with the vehicle has a duty to disclose that information. The definition of “material” is very fact-specific and depends on each individual vehicle and/or transaction. This is especially true if the issue is a safety related issue or goes to the vehicle’s road-worthiness. Providing Vehicle History Reports, such as CarFax and Autocheck, is a good way to disclose known conditions especially if you have the consumer acknowledging the receipt of the record. However, if the dealer is aware of an unreported issue that could be material, they should also disclose that issue as well. 3. Selling a Vehicle to a Tax-Exempt Entity: In any transaction where the individual or entity is claiming a tax exempt status, a certificate of exemption must be completed and signed by the consumer stating the applicable exemption. A copy of the form can be found here: http://www.tax.ohio.gov/ portals/0/forms/fill-in/sales_and_use/exemption_certificates/ST_STEC_B_FI.pdf. 4. Using Trade-In Appraisal Forms as Part of Your Intake Procedure: With the growing trend of vehicle history reports on trade-in intake, we are seeing a number of dealers not using the trade-in appraisal form. While a vehicle history report is a useful tool for information, it should be used as a supplement to the trade-in appraisal form. Trade-in appraisal forms can add an extra layer of protection of your dealership and also provide additional information that is not on a vehicle history report. Page 9 Moreover, using a trade-in appraisal requires the customer to state pertinent information such as collision and accident history, odometer issues, and emissions tampering that they are aware of, giving you information that may not have posted to your vehicle history report. Additionally, the affirmation from the consumer can be used as grounds for recourse against the consumer if his/her affirmations prove to be untrue. 5. Completing Credit Applications over the Phone: Dealers can take credit applications over the phone. However, a dealer should consider trying to guide the consumer to your dealership’s website and have the consumer submit an application through your online portal. If the consumer does not wish to do that, then the best practice is to get the consumer’s e-mail address and send a follow-up email immediately after your conversation confirming receipt of their telephone call and asking them to confirm the dealership has the authority to run their credit for financing. < SAFET Y CORNER brought to you by KPA, OADA’s Endorsed Provider of Safety & Environmental Compliance Services First Aid Kits- A Requirement or Recommendation? Don’t be Oversold! by Betsy Silba What do you really need in your first aid kit? Some employers pay vendors to periodically inspect and supply their first aid kits. During their visit, a vendor may be quick to say “OSHA requires…” this, that and the other thing. The Occupational Safety and Health Administration (OSHA) states in 29 CFR 1910.151, “Adequate first aid supplies shall be readily available.” OSHA goes on to reference American National Standards Institute (ANSI) Z308.1-1998, “Minimum Requirements for Workplace First-aid Kits,” to provide an example of what should be contained in your first aid kit. KPA recommends employers provide first aid kits that meet the minimum requirements set forth by the 1998 ANSI standard. Do not allow a vendor to “oversell” you contents for your first aid kit; stick with the requirements. Since 1998, there have been revisions to the ANSI standard but OSHA has not modified the regulation to include the most recent revision. Vendors may make the interpretation that since the ANSI standard has been revised they can use this as a selling tool to provide additional contents in your first aid kits. What the vendor is proposing is their recommendation based on an ANSI revision which has not been incorporated into the OSHA regulation. workplace, there may be additional contents you want to include. Your KPA Risk Management Consultant can assist you in making that determination in conjunction with local fire/rescue department or appropriate medical professionals as needed. If you choose to maintain your own first aid kits refer to the log for guidance. These supplies are readily available in local stores at a fraction of the price you may be paying for vendor services. OSHA does not “approve” the contents of first aid kits, however, an OSHA inspector may cite you if the contents are not adequate to respond to an injury requiring first aid treatment. Other considerations for first aid kits include: Back to School Customer Incentives provided by Reynolds & Reynolds It may be hard to believe, but summer is winding down and back to school season is here. As students from kindergarten to college head back to class, we all want to make sure they arrive safely and on time. Sometimes that requires fixing vehicle issues ignored over the summer. Help ease the strain on family budgets by offering extra incentives for customers to bring their vehicles in for service. One successful way to reach current and prospective customers is through a quality direct mail service. Remember though—not all mailers are created equal. Make sure your mailers pass the test. Pop quiz! What should you look for in a quality back to school direct mail piece? • Size and placement- The contents listed are based on a small business; larger businesses may require additional volume. • Bright, bold colors and graphics that stand out in the mailbox. • Availability-First aid kits must be readily available. You may need multiple first aid kits in your facility to ensure they are available and easily accessible to employees. • Imagery that customers associate with going back to school. • Marking-First aid kits and locations shall be clearly marked. • Inspections-First aid kits shall be routinely inspected and expiration dates On the First Aid Kit Inspection Log below, verified. you will see the list of minimum requirements and the additions that were inState regulations may be more stringent cluded with the next two ANSI revisions. than federal regulations. Contact a KPA Based on the potential hazards in your Risk Management Consultant or email info@kpaonline.com to determine the requirements for your location. This article is provided by KPA, an OADA endorsed partner for Environment & Safety services at Auto, Heavy Equipment/Agricultural, Motorcycle, RV, and Truck Dealers. If you have additional questions, please contact Glorianna Cooley, Sr. Risk Management Consultant with KPA at (614) 432-5044 or email info@kpaonline.com. < Page 10 • Coupons and offers that entice customers to visit your dealership for service. • The customer’s name in the body of the mail piece (other than in the address block) to give it a more personal message. • Promoted amenities, such as free Wi-Fi, to make your dealership more attractive. • Clearly listed service department hours. • Easy to locate contact information including phone number and website. Prepare your specials early to capture as many customers as possible before they head back to school. Utilize your customer database and available lists to reach the audience most likely to take advantage of your offers. Create an A+ direct mail piece that promotes your dealership as the best source for back to school service—contact your Reynolds Document Services Consultant, call (800) 344.0996, or email RDS@reyrey.com. < 4th ANNUAL NEXT GEN RACING DAY SEPTEMBER 15, 2016 10 am - 3 pm GRAND PRIX KARTING 1300 Alum Creek Drive, Columbus, OH 43209 Presented by: Sponsored by: A day of FAST racing fun! 1/2 mile indoor supertrack On-track racing, head-to-head with fellow Next Gens Develop your dealer peer network Special guest speaker TBA Please adhere to the dress code: Closed-toed shoes are required Loose hair must be pulled back under helmet REGISTER TODAY! Space is limited due to the number of driver’s seats available. This event filled up last year, so act fast! Name: ________________________________________ Dealership: __________________________________________________ Cell: __________________________________________ E-mail: ______________________________________________________ Cost: There is no cost to attend the event, but a $200 contribution to Legal Defense Fund OR a $150 contribution to DIG (Dealers Investment Group) is encouraged. I wish to contribute to: Legal Defense Fund ($200) Check Enclosed DIG ($150) Please Charge Card #: _________ _________ _________ __________ corporate or personal funds acceptable MUST BE a personal check or personal credit card Expires: _______ / _______ Security Code: ______________ Please return to: Kelly Danison at kdanison@oada.com or fax to (614) 766-9600 If mailing with a check, send to: OADA, Attn. Kelly Danison, 655 Metro Place South, Suite 270, Dublin, OH 43017 Questions? Call Kelly at (614) 923-2228 Dealership Succession Planning—Moving Metal to the Next Generation OADA 655 METRO PLACE SOUTH, SUITE 270 DUBLIN, OHIO 43017 Tuesday, August 9, 2016 11:00am-noon Tel: 614-923-2231 614-766-9100 x109 800-686-9100 There is a $30 connection fee for OADA member dealers. Nonmembers will be charged a $50 connection fee. OADA Brown Bag Lunch Webinar Series Many owners have the pleasure of witnessing family members work in their dealerships. Owners generally find great satisfaction in watching these family members develop both personally and professionally through a business they cultivated to become not only successful adults, but also next generation business owners. At some point, when (i) these family members have developed the requisite skills and/or (ii) owners are looking to completely or partially exit, a transition of control and ownership will occur. OADA invites you to join us as we host Greg Allison from Schneider Downs & Co., Inc., Pittsburgh office, as he instructs you on how to prepare for this transition. From a high level, this transition may seem like a simple process—the owners will transfer control to certain family members when he or she is ready. However, this approach to succession planning is like driving to a new destination without a map or directions. With much good fortune, the adventurer may end up at his or her destination with no issue. However, chances are you will become lost, waste time asking for directions, stop for an extra tank of gas, and arrive late, embattled, and lighter in the pocketbook. This webinar will take the form of a one-hour estate and succession planning case study involving a fictitious dealership. It will begin with the initial meeting with the owners where succession planning first surfaces and will end when the last share of stock is transferred to the next generation. We will explore the many different issues that commonly arise during this process such as: When to transfer voting stock When to transfer nonvoting stock How to provide for children that are not in the business What role trusts can play in this process How the federal estate and gift tax and impact this succession plan Dealership Succession Planning—Moving Metal to the Next Generation Name (s) Dealership Email (s) Phone Method of Payment Visa Bill Me MasterCard Check American Express Signature Webinar $30.00 Link to Electronic Recording $20.00 DVD Recording $20.00 Credit Card # Exp. date sec code. Retail Warranty Reimbursement—A 360 Degree View OADA 655 METRO PLACE SOUTH, SUITE 270 DUBLIN, OHIO 43017 Wednesday, August 17, 2016 11:00am-noon OADA Brown Bag Lunch Webinar Series Forty states, including Ohio, now allow for warranty claims to be reimbursed at “retail.” That’s where the simplicity ends, and the complexity begins. Join OADA and our newest endorsed partner, Armada Dealer Solutions, as we bring you this FREE webinar, which will explore this topic in detail. This webinar will define the opportunities, the challenges and solutions in an area that may just be one of the most misunderstood subjects in the retail automotive industry. This webinar will demystify the: Tel: 614-923-2231 614-766-9100 x109 800-686-9100 There is no connection fee for OADA member dealers. Non-members will be charged a $50 connection fee. True definition of retail (it’s not MSRP) Inherent complexity of the new law Manufacturers’ submission protocols Process of Optimization Factory warranty managers’ techniques Manufacturer push-back and resolution In addition, the criteria for deciding whether to perform this process in-house, or to outsource it, will be covered in detail, including the “need to know” for vendor selection. This will be an unprecedented, comprehensive deep dive into this subject matter, and it will dispel the myriad of myths surrounding it. Our presenter for this topic will be Joe Jankowski, Managing Partner for Armada Dealer Solutions. Armada is a firm specializing in Retail Warranty Reimbursement. With over 1,800 clients in 39 states, Armada is by far the leader in providing retail uplift services to automotive dealers. Retail Warranty Reimbursement—A 360 Degree View Name (s) Webinar FREE Link to Electronic Recording FREE DVD Recording $20.00 Dealership Email (s) Phone Method of Payment Visa Bill Me MasterCard Check American Express Signature Credit Card # Exp. date sec code. Hiring 101—What You Can Ask, Should Ask, and Should Never Ask OADA 655 METRO PLACE SOUTH, SUITE 270 DUBLIN, OHIO 43017 OADA Brown Bag Lunch Webinar Series And How to Create Defensible Hiring (and Firing) Decisions… Monday, August 19, 2016 11:00am-noon Tel: 614-923-2231 614-766-9100 x109 800-686-9100 There is a $25 connection fee for OADA member dealers. Nonmembers will be charged a $50 connection fee. As part of our ongoing effort to provide members with practical assistance in managing their employment law concerns, OADA and Fisher Phillips are offering this webinar to help address issues related to hiring and retention. In this presentation, we’ll discuss issues frequently raised by dealers through the OADA legal hotline. This webinar is for anyone who participates in the hiring process. Topics that will be covered include: What questions can you ask an applicant, and which questions are off limits? How can you ensure you are hiring assets instead of liabilities? What recent changes in the law affect the hiring process, from employment applications to post-hire questionnaires? How do you handle it if a background or driving check shows a problem? Practically, how do you create documentation that will withstand legal challenge? What are the “warning signs when hiring,” how can you identify, interview, and select the best candidate while avoiding legal liability? How do you protect your dealership from EEO violations and discriminatory practices? What are the pros and cons of implementing background checks, aptitude tests, drug testing and/or physical exams? Melanie Webber, a partner with Fisher Phillips Cleveland Office and a frequent OADA presenter, will facilitate this webinar and take your questions. Fisher Phillips serves as labor and employment counsel to OADA and provides members counseling regarding employment issues through OADA’s legal hotline. The firm’s practice is limited exclusively to the areas of labor and employment law representing employers. Hiring 101—What You Can Ask, Should Ask and Should Never Ask (and How to Create Defensible Hiring—and Firing— Decisions) Name (s) Webinar $25.00 Link to Electronic Recording $20.00 DVD Recording $20.00 Dealership Email (s) Phone Method of Payment Visa Bill Me MasterCard Check American Express Signature Credit Card # Exp. date sec code.