Michigan Drive Line Spring 13

of MichiganManaged BySpring 2013

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

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SPRING 2013 D R I V E L I N E

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w w w . m i a d a . o r g

MAGAZINE CONTENTS

ADVERTISERS INDEX

OFFICE

ADESA, Inc. .................. Inside Front CoverAlly ...................................................... 11Chase .................................................. 12Computerized Vehicle Registration ........19Dealix .....................................................7Greater Kalamazoo Auto Auction .......... 13Indiana Auto Auction .............................16Insurance Auto Auctions ........................14Lakeside Insurance Agency ...................17Manheim.com .........................................5NextGear Capital .....................................9Protective .................... Inside Back CoverUnited Acceptance ................................15VAuto .......................................Back Cover

inside04 Buyers Guide Changes06 Update on the ACA10 New & Renewing Members12 NHTSA Recalls08 Vehicle Marketing Firm Barred16 Lexus Tops in Dependability19 CFPB Compliant Network20 MIADA Member Application17 Presenting Your Portfolio26 Compliance Overdrive

The Purpose for Which MIADA was OrganizedREPRINTED FROM THE MIADA ARTICLES OF INCORPORATION, JUNE 22, 1981To unite in common organization those engaged in the automobile business and others interested

in said business and in the welfare of our State;To protect and promote the mutual interest of its Members;To formulate and maintain ethical standards for the guidance of its members in their relations with

each other and with the public;To advocate necessary public improvements and oppose unnecessary or wasteful expenditure of

public funds;To promote and encourage the enactment of just and reasonable laws and ordinances affecting

the licensing, regulating and conducting of the automobile business, and to oppose the enactment of those that would be unjust and unreasonable;

To correlate the activities of the National Independent Automobile Dealers Association with the Michigan Independent Dealers Association and local dealer Associations in this State.

S I N C E 19 9 3

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TVNIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected] Driveline is a publication of the Michigan Independent Automobile Dealers Association Inc., but is also mailed to non-member dealers in Michigan in an effort to encourage them to join and support our efforts to improve the profit potential for the industry. The Driveline is published quarterly by Automotive Dealers Resource of Michigan, 55 E Long Lake Rd. PMB 233, Troy, MI and the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006. Periodical postage is paid at Arlington TX, and at additional offices. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of the Michigan Independent Automobile Dealers Association Inc., Automotive Dealers Resource of Michigan, or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of the Michigan or National Associations does not constitute an endorsement of the products or services featured. For 31 years, we have worked to represent the independent automobile dealers in Michigan. We need your support. PUBLISHER/EDITOR AT LARGE: Nancy R. ChapmanFRONT COVER BY Allison Chapman WilkeSTATE MAGAZINE MGR./SALES Troy Graff • [email protected] Allison Chapman Wilke • [email protected] ART DIRECTOR Christy Haynes • [email protected] Nieman Printing

CHAIRMAN OFTHE BOARD Ed OphoffOphoff Motor Sales2921 S. DivisionWyoming, MI [email protected]

PRESIDENTJerry DrouillardAutohaus4411 DelemereRoyal Oak, MI [email protected]

VICE PRESIDENTRay CampiseCertified Motors23509 Little MackSt. Clair Shores, MI 48080586-775-7000sales@[email protected]

TREASURERVince Law Jr.Law Auto Sales32115 Michigan Ave.Wayne, MI [email protected]

BOARD OF DIRECTORSSECRETARYTed CooperGenesys Systems360 E. MapleTroy, MI [email protected]

DIRECTORSDennis CraigInstant Car CreditP.O. Box 146Acme, MI [email protected]

Joe KuhtaGWC Warranty 8865 ReeseClarkston, MI [email protected]

Rick RynbergRynberg’s Car Company3880 Holton Rd.Muskegon, MI [email protected]

Tony LoBrettoAlamo Valley Auto Sales6100 West “D” Ave.Kalamazoo, MI [email protected]

Bob VincentMSG Credit Union4555 Investment Dr.Troy, MI 48098,586-263-8800 x [email protected]

Executive DirectorNancy R. ChapmanADR of Michigan 55 E Long Lake Rd. PMB 233Troy, MI [email protected] or [email protected]

All events are listed online at www.miada.org

MIADA EVENTSREastern Chapter Meeting:

Tuesday, April 9, 7pm, American Polish Cultural Center, Troy

RWest Michigan Chapter Meeting: May 20, 6:30 pm, Brann’s Steakhouse, Grand Rapids

FINANCING NOW AVAILABLE ON ELIGIBLE PREMIUMS!

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D R I V E L I N E SPRING 2013

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INDUSTRY NEWS

THE USED CAR RULE, formally known as the Used Motor Vehicle Trade Regulation Rule, has been in effect since 1985 and requires car dealers to display a window sticker, known as a Buyers Guide, on the used cars they offer for sale. The Buyers Guide discloses whether the dealer offers a warranty and, if so, its terms and conditions, including the duration of the coverage, the percentage of total repair costs the dealer will pay and which vehicle systems the warranty covers. The FTC’s proposed changes include minor changes to improve readability, adding catalytic converters and airbags to the list of systems on the back of the form, as well as the three material changes discussed below.

Currently, the FTC authorizes both English and Spanish versions of the Buyers Guide. When a used motor vehicle sale is conducted in Spanish, the Used Car Rule requires dealers to use Spanish-language versions of the Buyers Guide and to make related contract disclosures in Spanish. The FTC staff recommends that dealers who conduct substantial numbers of sales in Spanish should display both English and Spanish Buyers Guides to ensure that Spanish-speaking customers receive the required disclosures. In lieu of creating a bilingual Guide, as some commenters have suggested over the years, the FTC is proposing adding a statement in Spanish to the English Buyers Guide directing Spanish-speaking consumers to ask for a copy in Spanish, if they desire.

The Buyers Guide format in use today does not provide specific mention of third-party warranties, such as those offered by the manufacturer. To disclose the existence of such warranties, the used dealer currently enters appropriate language in the “Systems Covered/Duration” section on the front of the form. The FTC is proposing adding check-boxes and pre-printed language to the back of the form specifically for those warranty disclosures. It’s worth noting that the FTC is not proposing making mandatory the optional disclosure of unexpired manufacturers’ warranties.

As has been widely reported, California recently enacted legislation requiring used dealers to post vehicle history reports on vehicles offered for sale. Specifically, the California dealers must provide a National Motor Vehicle Title Information System (NMVTIS) report. Along that same line, the FTC is proposing adding a statement to the Buyers Guide encouraging customers to seek vehicle history information and directing consumers to an FTC website for more information about vehicle histories.

As currently proposed, dealers would not be required to obtain vehicle histories or to display specific vehicle history information. Thanks to comments offered in earlier years by industry groups, including the National Independent Automobile Dealers Association, the FTC has decided against requiring dealers to include title branding and certain vehicle history data directly on the Buyers Guide. In earlier comments, NIADA and others raised concerns about dealers’ potential liability for reporting information that they do not control. Since vehicle history information is available from multiple sources, and that information could be inaccurate, untimely, or incomplete, dealers could have faced potential legal risks for reporting third-party information that turned out to be deficient.

In addition to declining to add title branding and certain vehicle history information to the Buyers Guide, the FTC has also declined a number of other suggestions. Again, thanks to comments made over the years by industry groups such as NIADA and NADA, the FTC is not proposing Buyers Guide disclosure requirements regarding prior vehicle damage, prior vehicle use, manufacturer buyback or lemon law status or known defects. In addition, the FTC declined a suggestion to propose a dealer inspection requirement.

The FTC will continue to accept public comments regarding the changes until March 13, 2013.

In addition to these proposed changes to the rule, the FTC also recently announced a new final Rule that makes minor corrections to the Spanish translation of the Buyers Guide. The revised Spanish-language versions took effect on February 11, 2013, but dealers may use up any remaining supplies of the current Buyers Guide.

Proposed Changes to the Buyer’s Guide

F T C E X T E N D S P E R I O D FO R P U B L I C C O M M E N T S U N T I L M A RC H 1 3 , 2 01 3

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The Affordable Care Act (ACA) of 2010 enacted significant changes to America’s health care system. Many of the changes directly affect small business. Some tax provisions of the law were effective beginning in 2010; others are being gradually implemented. Internal Revenue Service (IRS) guidance of ACA issues impacting small businesses and individuals in 2013 and 2014 is provided below. INDIVIDUALS

Health Insurance Premium Tax Credit: Starting in 2014, individuals and families can take a new premium tax credit to help them afford health insurance coverage purchased through an Affordable Insurance Exchange. Exchanges will operate in every state. The premium tax credit is refundable so taxpayers who have little or no income tax liability can still benefit. The credit also can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums.

On May 18, 2012, the IRS issued final regulations which provide guidance for individuals who enroll in qualified health plans through Exchanges and claim the premium tax credit, and for Exchanges that make qualified health plans available to individuals and employers. The portion of the law allowing individuals to use tax credits to purchase health coverage through an Exchange will become effective in 2014. Exchanges will offer individuals a choice of health plans that meet certain benefit and cost standards.

The Department of Health and Human Services administers the requirements for the Exchanges and the health plans they offer. Additional information about the Exchanges can be found at www.healthcare.gov and in IRS REG-131491-10 issued on August 12, 2011.

Health Coverage for Older Children: Health coverage for an employee’s children under 27 years of age is now generally tax-free to the employee. This expanded Health care tax benefit applies to various work place and retiree health plans. These changes immediately allow employers with cafeteria plans – plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits – to permit employees to begin making pre-tax contributions to pay for this expanded benefit. This also applies to self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return.

Net Investment Income Tax: A new Net Investment Income Tax goes into effect starting in 2013. The 3.8 percent tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts.BUSINESSES

Additional Medicare Tax: A new Additional Medicare Tax goes into effect starting in 2013. The 0.9 percent tax applies to an individual’s wages, Railroad Retirement Tax Act compensation and self-employment income exceeding a threshold amount based on the individual’s filing status. The threshold amounts are $250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately and $200,000 for all other taxpayers. An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year.

Small Business Health Care Tax Credit: This new credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees and is specifically targeted for those with low-and moderate-income workers. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees.

Reporting Employer Provided Health Coverage in Form W2: The ACA requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W2. Many employers are eligible for transition relief for tax-year 2012 and beyond, until the IRS issues final guidance for this reporting requirement. The amount reported does not affect tax liability, as the value of the employer excludible contribution to health coverage continues to be excludible from an employee’s income and is not taxable. This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers.

Health Flex Spending Arrangements: Starting in 2013, there are new rules about the amount that can be contributed to a Flex Spending Arrangement. IRS Notice 2012-40 provides information about these rules and flexibility for employers applying the new rules and requests comments about other possible administrative changes to the rules on FSA contributions.

Group Health Plan Requirements: The ACA establishes a number of new requirements for group health plans. Interim guidance on changes to the nondiscrimination requirements for group health plans can be found in IRS Notice 2011-1, which provides that employers will not be subject to penalties until after additional guidance is issued. Additionally, TD 9575 and REG-4003810, issued by the Department of Labor, Health and Human Services, and IRS, provide information on the summary of benefits and coverage, as well as the uniform glossary. IRS Notice 2012-59 provides guidance to group health plans on the waiting periods they may apply before coverage starts. Other information on group health plan requirements is available on the websites of the Department of Health and Human Services, the Department of Labor and the IRS.

Employer Shared Responsibility Payment: Starting in 2014, employers employing at least 50 full-time employees will be subject to the Employer Shared Responsibility provisions of the Affordable Care Act (ACA). Under these provisions, employers who do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees may be subject to an Employer Shared Responsibility payment if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges. Your employee count in 2013 will be used to determine responsibility for 2014.

Employers who employ fewer than 50 full-time employees or an equivalent combination of full-time and part-time employees (described below) are not subject to the Employer Shared Responsibility provisions. An employer with at least 50 full-time employees (or equivalents) will not be subject to an Employer shared Responsibility payment if the employer offers

affordable health coverage that provides a minimum level of coverage to its full-time employees.

As defined by the statute, a full-time employee is an individual employed at least 30 hours per week on average; half-time would be an average of 15 hours per week. It is important to note that part-time employees are factored as full-time equivalent employees for the purpose of calculating whether an employer is subject to the employer mandate. So, 100 half-time employees would be considered equivalent to 50 full-time employees. Similarly, 40 full- and 20 half-time employees would also be equivalent to 50 full-time employees.

If two or more companies have a common owner or are otherwise related, they are generally combined for purposes of determining whether they are subject to the Employer Shared Responsibility provisions. If the combined full-time or equivalent total meets the threshold, then each separate company is subject to the provisions, regardless of whether they meet the threshold individually.

In 2014, employers meeting the 50 full-time employee threshold generally will be liable for an Employer Shared Responsibility payment if:

•Theemployerdoesnotofferhealthcoverageor offers coverage to less than 95% of its full-time employees, and at least one of the full-time employees receives a premium tax credit to help pay for coverage on an Exchange; or

•Theemployeroffershealthcoveragetoatleast95% of its full-time employees, but at least one full-time employee receives a premium tax credit to help pay for coverage on an Exchange, which may occur because the employer did not offer coverage to that employee or because the coverage the offered to that employee was either unaffordable to the employee or did not provide minimum value.

After 2014, the rule in the first bullet point above applies to employers that do not offer health coverage or that offer coverage to less than 95% of their full-time employees and their dependents.

It is important to note that while part-time employees do factor into the determination of employer size, they are not counted for the purposes of any Employer Shared Responsibility payments assessed. Should an employer have to pay an Employer Shared Responsibility penalty, liability will be equal to $2,000 times the number of actual full-time employees, minus 30. The 30 employee exclusion is allocated among all related companies owned by a given employer.

So, using the previous example, if an employer with 40 full-time plus 20 half-time employees is required to pay the Employer Shared Responsibility payment, the amount due would be $2,000 times ten employees (40 actual full-time employees minus the 30 employee exclusion).

The IRS will contact employers to inform them of any potential liability and provide them an opportunity to respond before liability is assessed or notice and demand for payment is made.

The contact for a given calendar year will not occur until after employees’ individual tax returns are due for that year claiming premium tax credits and after the due date for employers that meet the 50 full-time employee (plus full-time equivalents) threshold to file the information returns identifying their full-time employees and describing the coverage that was offered (if any).

For more information, go online to www.irs.gov and search “affordable care act tax provisions.”

BY ADR STAFF

Update on the Affordable Care Act

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C O N T I N U E D O N PAG E 10

On January 15, 2013, the offices of Iowa Attorney General Tom Miller and North Carolina Attorney General Roy Cooper independently issued press releases announcing consent judgments involving Level 10 Marketing and David M. Bottner, the owner.

In Iowa, District Judge Robert A. Hutchison permanently enjoined and restrained Bottner, 40, of Slidell, Louisiana, and his now-defunct company, Level 10 Marketing, Inc., from engaging in any conduct in connection with the sale, lease, or advertisement of vehicles in Iowa. In North Carolina, Wake County Superior Court Judge Donald W. Stephens signed a consent order permanently banning Level 10 marketing and its owner from engaging in any advertising or promotional business with new or used automobile dealerships in North Carolina. Judges in Arizona, Kentucky, Maryland, Oregon, and Pennsylvania issued similar court orders on the same day. Attorneys general in Maine and Washington had previously taken action against the defendants.

According to the Iowa and North Carolina Attorneys General, Bottner and his company misrepresented vehicle sales events on behalf of vehicle dealers by falsely claiming or implying that the sales events involved vehicles brought in from elsewhere for the sale. Level 10 Marketing advertised local dealers’ sales events using misleading terms such as “lender’s inventory sale” or “repossessed vehicle event,” and used other misleading terms conveying a false sense of urgency, such as “emergency disposal,” and “liquidation.”

According to the press releases, company advertisements also claimed that used vehicles would be sold at “90 percent off original price,” which was actually a comparison with the Manufacturer’s Retail Price (MSRP) of the vehicle when new, and falsely claimed that “some vehicles will be available for $1 down, $114 per month.” These ads routinely misrepresented the cost of the vehicles and the ability of consumers to obtain financing.

It is ultimately the dealership’s responsibility to ensureits advertising complies with the law. Do not rely on the agency preparing the ad to ensure compliance. Both in spirit and in fact, your advertising should be truthful and non-deceptive; you should have evidence to back up any claims; and your advertisements should not be unfair.

When preparing your advertising material for correctness, look at the ad from the point of view of the “reasonable consumer” – the typical person looking at the ad. Rather than focusing on certain words, look at the ad in context – words, phrases, and pictures – to determine what it conveys to consumers.

GENERAL ADVERTISINGAn ad may be considered deceptive if

it contains a statement – or if it omits a statement – that:

•islikelytomisleadconsumersactingreasonably under the circumstances; and

•is“material”–thatis,importanttoa consumer’s decision to buy or use the product.

For example, an advertisement might read “2007 Chevy, only $75 per month.” Whether this is a bargain depends upon information missing from the advertisement, such as the down payment and the number of payments. The ad also omits the annual percentage rate and does not state whether the transaction is a credit sale or a lease. The ad needs to tell the whole story.

Under the law, advertisers must have proof to back up both “express” and “implied” claims that consumers take from an ad. An “express” claim is literally made in the ad. For example, “We finance anyone” is an express claim that any consumer can obtain financing through your dealership. An implied claim is one made indirectly or by inference. “No money – no problem” contains an implied claim that anyone, regardless of financial position, can obtain financing for a vehicle purchase.

“Bait and Switch” advertising is a violation of the law. It is illegal to advertise a product if you have no intention of selling that item, but instead plan to sell a consumer another product, usually at a higher price.

Rebate offers may be particularly scrutinized. Ads that include rebate promotions should prominently state the before-rebate cost, as well as the amount of the rebate. Only then will consumers know their actual out-of-pocket cost and have the information they need to comparison shop. Rebate promotions also should clearly disclose any additional terms and conditions that consumers need to know, including the key terms of any purchase requirements, additional fees, and when consumers can expect to receive their rebate.

If an ad mentions that a product comes with a guarantee or warranty, the ad should

clearly disclose how consumers can get the details. Any conditions or limits on the guarantee or warranty (such as a time limit or a requirement that the consumer return the product) also must be clearly disclosed in the ad. Finally, the law requires companies to make copies of any warranties available to consumers before the sale.

Pricing is another area of advertising that can receive scrutiny from regulators. One common practice is to offer a reduction from a former price. If the former price is the actual, bona fide price at which the vehicle was offered for sale for a reasonably susbstantial period of time, it provides a legitimate basis for the advertising of a price comparison. The “former” price should not be an artificial, inflated price established for the purpose of advertising a bargain “reduced” price. If the former price is not set forth in the ad, as when the ad merely states “Sale”, the amount of the reduction must not be so insignificant as to be meaningless. For instance, a claim that a vehicle has been “Reduced to $9,999”, when the former price was $10,000, is misleading the consumer.

ADVERTISING CREDIT AND LEASESCertain rules apply only to creditors

and lessors. Keep the following principles in mind when you design or review an ad promoting consumer credit or consumer leases.

All advertising disclosures must be printed “clearly and conspicuously.” This means that disclosures must be legible and reasonably understandable.

You may advertise only credit or lease terms that are actually available to the consumer. “Bait and switch” credit or lease promotions are not allowed. For example, no advertisement may state that a specific installment payment or a specific down payment can be arranged unless the creditor is prepared to make those arrangements. However, you may advertise terms that will be offered only for a limited time or terms that will become available at a known future date. You need not, of course, promote every credit or lease plan that you offer.

The main requirements governing advertising of closed-end credit concern “triggering terms” and “finance rates.” These requirements may apply to a single ad. If you advertise closed-end credit with a “triggering term,” you also must disclose other major terms, including the annual percentage rate. This rule is intended to ensure that all important terms of a credit plan, not just the most attractive ones,

Vehicle Marketing Firm Barred in Seven States

INDUSTRY NEWSI T I S U LT I M AT E LY T H E D E A L E R S H I P ’ S R E S P O N S I B I L I T Y T O E N S U R E I T S A DV E R T I S I N G C O M P L I E S W I T H T H E L AW.

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Vehicle Marketing Firm Barred in Seven States

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using that term or the abbreviation “APR”. If the annual percentage rate may be increased after consummation of the credit transaction, that fact also must be stated.

The amount or percentage of the “down payment” need not be shown directly, as long as it can be determined from the ad. For example, “10% cash required from buyer” or “credit terms require minimum $1000 trade-in” would satisfy the disclosure requirement.

The “terms of repayment” may be expressed in a variety of ways, as long as they convey the required information. For example, an automobile finance company might use unit cost to disclose repayment terms: “48 monthly payments of $23.44 for each $1000 borrowed.” Similarly, the length of the loan can be expressed as the number of payments or the time period of the loan.

SAMPLE DISCLOSURE: The following disclosure of car financing offered by the dealer would comply with the law if printed clearly and conspicuously:

“Special close-out sale this weekend. Any in-stock Chevy Citation, only 5% down, 5.9% APR (on approved credit). Example: 48 monthly payments of $224.95”

The second basic requirement for advertising closed-end credit is this: if your ad shows the finance charge as a rate, that rate must be stated as an “annual percentage rate,” using that term or the abbreviation “APR.” Your ad must state the annual percentage rate, even if it is the same as the simple interest rate. So, if you are a car dealer who wants to advertise low-rate financing made available by the manufacturer, your advertisement would read, for example, “5.9% annual percentage rate” or “5.9% APR.” If you want to show only a rate, the APR is stated in the ad, no other credit information need be included: the “triggering term” requirement does not apply because the rate and APR are not triggering terms.

Your advertisements will be noticed and will undoubtedly draw a response from someone. Fair and truthful ads will be appreciated by consumers and will typically result in a positive response. Deceptive and misleading ads, however, will be noticed by the authorties and could result in a very negative response for your dealership. More in-depth guidance on preparing compliant advertising pieces is available on the Federal Trade Commission website, www.ftc.gov.

NOTE: Neither MIADA or ADR of Michigan offers legal advice. This article was prepared for informational purposes only. For its applicability to your business, please consult your legal counsel.

C O N T I N U E D F RO M PAG E 8INDUSTRY NEWSappear in an ad.

The triggering terms for closed-end credit are:

(1) The amount of the down payment (expressed as either a percentage or dollar amount), in a “credit sale” transaction.

Examples: “10% down” “$1000 down” “90% financing” “trade-in with $1000 appraised value

required”(2) The amount of any payment

(expressed as either a percentage or dollar amount).

Examples: “Monthly payments less than $250 on

all our loan plans” “Pay $23.44 per $1000 amount

borrowed” “$210.95 per month” (3) The number of payments or the

period of repayment.Examples: “Up to four years to pay” “48 months to pay” “30-year mortgages available” (4) The amount of any finance

charge. Examples: “Financing costs less than $300 per

year” “Less than $1200 interest” “$2.00 monthly carrying charge.”Some statements about credit terms

are too general to trigger additional disclosures. Examples of terms that do not trigger the required disclosures are:

“No down payment” “Easy monthly payments” “Loans available at 5% below our

standard APR” “Low down payment accepted” “Pay weekly” “Terms to fit your budget” “Financing available”.General statements, such as “take

years to pay” or “no closing costs,” do not trigger further disclosures because they do not state or suggest the period of repayment or down payment cost. In contrast, the statement “drive it home for $199,” which implies that the required cash down payment is no more than $199, does trigger full disclosure. Similarly, a statement such as “up to 48 months to pay” lists the period of repayment and triggers disclosure. In general, the more specific the statement, the more likely it is to trigger additional disclosures.

If your ad for closed-end credit uses a triggering term, it also must include the following information:

(1) The amount or percentage of the down payment;

(2) The terms of repayment; and(3) The “annual percentage rate,”

New Members700 CREDIT, LLCJON’S AUTO & TRUCKSHORELINE SALES INC.SIMPLE AUTO INC.TOM LING AUTO SALES INC.ZURICH DIRECT MARKETERS

Renewing MembersALL STARZ AUTO CENTER INC.AMERICAN TRAILER MARTATKINS AUTO SALESAUTOTRADER.COMAUTO CORRALAUTO CREDIT CENTER INC.AUTO TREND WHOLESALE CAR CO.BILICKE AUTO SALES INC.BRIDGE VALLEY & ASSOCIATES INC.BROADMOOR MOTOR SALESBUCK & KNOBBY EQUIPMENT COMPANYBUD & DOUG WALTERS A/SBUDGET AUTO SALESCASCADE CARS, INC.CLASSY CHASSY LTD.CLEAN CARS, INC.DAVID RICE AUTO SALES LLCE & H AUTO REPAIR, INC.ELLIS RICHARDS MOTORSGLAMOUR AUTO GLOBAL WARRANTY CORPORATIONGOOD SHEPHERD PROPERTIESGOODWIN MOTORS INC.GRAND RAPIDS AUTO AUCTIONGREATER DETROIT AUTO AUCTIONHAROLD’S USED CARSHILLSIDE MOTOR SALESJ & K AUTOMOTIVE LLCJIM DOUGLAS AUTO SALESJOE BELSHAW MOTORSJOE RICCI AUTOMOTIVEK2 AUTOK & L SALES, INC.K.O.’S AUTO SALES L.L.C.KEMPTON AUTO DLEONARD ENTERPRISELINGENFELTER MOTOR SPORTS, LLCMADISON MOTOR SALESMANHEIM DETROITMCKENZIE & RICE AUTOMOTIVE, INC.MESSINA USED CARSMETRO WHOLESALE OUTLETMONACO MOTORS LTD.OPHOFF MOTOR SALESORCHARD AUTOPARIS MOTORS, INC.PREFERRED WARRANTIES INC.PRO COLLISION OF WEST MICHIGANPROUTS CUSTOM AUTORAY WINNIE AUTO SALESREITSMA AUTO SALES INC.RIDE PERFECTION CENTERROUSH’S AUTOMOTIVE, INC.RPM AUTO SALESRYAN’S WHEELS & DEALSSCHAFER CHEVROLETSHEPPARD MOTOR SALESSIMPLE AUTO SALES LLCSMITH EQUIPMENT INC.STADIUM MOTORSSUPERIOR USED CARS INC.TA’S AUTO, LLCTAILORED ENTERPRISES INC.THE AUTO MERCHANTS INC.THE GOOD CAR COMPANYTIMOTHY COLLINS AUTO SALESTRAPP INC.TRUMBULL AUTO SALESTYME AUTO SALESVIP AUTO CENTER INC.VITA MOTORSWES FINANCIAL AUTO GROUPWESTWOOD AUTO PLUS LLCWHOLESALE AUTO CO.ZIP’S TRUCK EQUIPMENT

MIADA NEW & RENEW

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NIADA CERTIFIED MASTER DEALER®

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Makes/Models/Model Years:BMW/128I/2008-2012BMW/135I/2008-2012BMW/328I/2007-2011BMW/335I/2007-2011BMW/Z4/2009-2011Mfr’s Report Date: February 7, 2013NHTSA Campaign Number: 13V-044Components: ELECTRICAL SYSTEMELECTRICAL SYSTEM: BATTERY:

CABLESELECTRICAL SYSTEM: FUSES AND

CIRCUIT BREAKERSPotential Number of Units Affected:

504,545Problem Description: BMW is

recalling certain model year 2008-2012 1-Series coupes and convertibles manufactured December 2007 through July 2011; 2007-2011 3-Series coupes and convertibles manufactured March 2007 through July 2011; 2007-2011 3-Series sedans manufactured March 2007 through October 2011; 2007-2011 3-Series sports wagons manufactured March 2007 through June 2011; and 2009-2011 Z4 vehicles manufactured

March 2009 through June 2011. The connector for the positive battery cable connector and the corresponding terminal on the fuse box may degrade over time. Over time, the high current flow and heat from electrical resistance may lead to a breakage of the connection, and a loss of electrical power to the vehicle.

Consequence: If there is a loss of electrical power to the vehicle, the vehicle may unexpectedly stall, increasing the risk of a crash.

Remedy: BMW will notify owners, and dealers will replace the positive battery cable connector and secure it with an improved method, free of charge. The recall is expected to begin in March 2013. Owners may call BMW at 800-525-7417 or email [email protected].

Makes/Models/Model Years: BMW/X5 SAV/2007-2010

Mfr’s Report Date: February 7, 2013NHTSA Campaign Number: 13V-045Components: SERVICE BRAKESSERVICE BRAKES, HYDRAULIC:

POWER ASSISTPotential Number of Units Affected:

30,265Problem Description: BMW is recalling

certain model year 2007-2010 X5 SAV vehicles, manufactured Sept.12, 2006, through March 18, 2010 and equipped with an 8-cylinder engine. The brake vacuum pump may leak a small amount of lubricating oil into the hose. The contamination could result in a loss of power assist braking.

Consequence: The loss of power assist in braking could increase stopping distance and lead to a vehicle crash.

Remedy: BMW will notify owners, and dealers will replace the brake vacuum line with one that contains a check valve, free of charge. The recall began in February 2013. Owners may call BMW at 800-525-7417 or email [email protected].

Makes/Models/Model Years:DODGE/VIPER/2003-2004Mfr’s Report Date: February 5, 2013NHTSA Campaign Number: 13V-040

INDUSTRY NEWS

NHTSA Recalls

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Components: AIR BAGSPotential Number of Units Affected:

3,660Problem Description: Chrysler is

recalling certain model year 2003 and 2004 Dodge Viper vehicles manufactured from Nov. 1, 2001, through June 30, 2004. A component in the air bag control module may fail causing the front airbags and/or seatbelt pre-tensioners to deploy inadvertently while the vehicle is being operated.

Consequence: Inadvertent deployment of the airbags and/or seat belt pre-tensioners could increase the risk of personal injury and the possibility of a crash.

Remedy: Chrysler will notify owners, and dealers will repair the vehicles free of charge. An interim notification was sent in February 2013. The remedy is expected to be available later in the year. Owners may contact Chrysler at 800-247-9753.

Makes/Models/Model Years:CHRYSLER/ASPEN/2009DODGE/DAKOTA/2009-2011DODGE/DURANGO/2009DODGE/RAM 1500/2009-2012Mfr’s Report Date: February 5, 2013

NHTSA Campaign Number: 13V-038Components: POWER TRAIN:

DRIVELINE: DIFFERENTIAL UNITPotential Number of Units Affected:

278,222Problem Description: Chrysler is

recalling certain model year 2009-2012 Ram 1500 trucks manufactured from Feb. 27, 2008, through June 30, 2009, and from Dec. 1, 2009, through Oct. 20, 2011; model year 2009-2011 Dodge Dakota trucks manufactured from Feb. 27, 2007, through June 30, 2009, and from Dec. 1, 2009, through Sept. 30, 2011; model year 2009 Chrysler Aspen trucks manufactured from Jan. 3, 2008, through Dec. 18, 2008; and model year 2009 Dodge Durango trucks manufactured from Jan. 3, 2008, through Dec. 18, 2008. The rear axle pinion nut may loosen due to an undersized pinion spline that can allow relative motion between the nut and companion flange.

Consequence: If the rear axle pinion nut loosens, the axle can lock up and cause a loss of vehicle control and/or a vehicle crash with little warning.

Remedy: Chrysler will notify owners, and dealers will install a pinion nut retainer, free of charge. The recall is expected to begin in March 2013. Owners may contact Chrysler at 800-247-9753.

What is National Tire Safety Week?

It’s a nationwide event sponsored by the Rubber Manufacturers Association to raise consumer awareness about tire safety.

Why should tire and automotive service professionals support National Tire Safety Week?

To help consumers keep their tires safe and to demonstrate your industry’s commitment to motorist safety.

National Tire Safety Week is scheduled for June 2-8, 2013

TO RECEIVE A NATIONAL TIRE SAFETY WEEK KIT, VISIT BETIRESMART.ORG

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ACCORDING TO ART SPINELLA, PRESIDENT OF CNW RESEARCH, February’s slight projected increase in retail used vehicles sales – about 0.3% – is a decent showing given the strength of the used-car market a year ago and the fact February had an extra day in 2012 due to the leap year. Used car sales should be near $2 million, with franchised dealers leading the marketplace. CNW also noted:

Franchised Dealers Sold Approximately 714,000 Units and Independents Approximately 700,000: Private party sales continue to be weaker than dealers, down 9.6% in opening days of February. Dealers Skimming Cream of Crop, Leaving Less Desirable Units for Private Party: CNW expects private party sales to rebound in second quarter of 2013. Used Prices Continue to be Weak, with Little Sign of Rebounding: Franchised and independents were only getting 93% and 92.7% of asking prices.

Private Party Sales Still Down, But Expected to Come Back

NIADA’S 2013 CONVENTION & EXPO OFFERS THE INDUSTRY’S BIGGEST AND MOST DIVERSE EDUCATIONAL OPPORTUNITY UNDER ONE ROOF.

With our dynamic mixed panel format, you’ll hear advice and best practices from industry experts, as well as real-world perspectives from dealers who are in the trenches every day - just like you. Find out what’s happening in the regulatory landscape, explore new marketing opportunities, learn how to refocus your sales and operations, discover new avenues for dealer capital...and more.

NIADA’s Convention & Expo is not only the largest event of its kind in the used car industry - it’s also the only one to offer live entertainment and a variety of fun networking opportunities.

RELAX POOLSIDE. Traveling can be stressful and tiring. After check-in, relax with us poolside for the Cigars & Martinis mixer. Enjoy music, mixed beverages and a light bite to eat in a lush, tropical wonderland.

KICK THINGS OFF VEGAS STYLE. Kick things off right at Monday’s Opening Gala...where a delicious array of food and a full bar await you. You won’t be able to stay in your seat as we pay tribute to rock legends Elton John, Billy Joel and Tina Turner in true Vegas style!

WIN BIG ON THE EXPO FLOOR. Participate in our daily Expo scavenger hunt for a chance to win $500 or even $1000! Plus, check out the car we’ll be auctioning off at the end of the week.

MINGLE WITH THE BEST OF THE BEST. Dine with us as we honor and celebrate the National Leadership and National Quality Dealer Award winners. And don’t forget to tell your friends back home to tune in for the live broadcast on NIADA.tv!

All this and more.For a registration rate that’s lower than

most other national conventions. We even offer discounted registration rates for spouses and children, plus discounts on hotel, airfare and ground transportation.

For more information or to register online, visit www.niada.com and click on Events.

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INDUSTRY NEWS

There is an old adage in the auto industry, “safety doesn’t sell.” That There is an old adage in the auto industry: “Safety doesn’t sell.”

That doesn’t seem to be true for today’s motorists. Safety has, in fact, become one of the highest-ranked attributes for most car shoppers, whether they’re looking for a minivan or sports car. So a new safety study produced by Insure.com, in cooperation with the Insurance Institute for Highway Safety (IIHS), delivers more than a few surprises when it comes to the safest – and least safe – of the approximately 750 vehicle models now on the market.

For those who equate size with safety, some of the results seem intuitive. For example, the pint-sized Fiat 500 was ranked the least safe vehicle in the study, while the GMC Sierra 1500 pickup was ranked the safest.

“If safety is a priority, you should avoid the smallest cars,” IIHS spokesman Russ Rader said.

From a brand standpoint, General Motors scored particularly well, with

big GMC models taking four of the top five spots among the safest vehicles. Mercedes and Toyota landed in the least safe category, and the study had little positive to say about the Toyota Corolla, though it is a top seller.

The study’s top and bottom five (in order), with comments from the study:

FIVE SAFEST VEHICLESGMC Sierra 1500: Full-size pickup has

physics in its favor.Porsche Cayenne: Four-door sports

car scores well on safety, too.GMC Yukon Denali: Well-contented

SUV includes lots of safety features.GMC Sierra 2500HD SLE: Heavy-duty

version of the Sierra pickup.GMC Terrain SLE1: Five-passenger

CUV scores among the best.

FIVE LEAST SAFE VEHICLESFiat 500: Boldly styled Italian coupe/

convertible has numerous safety issues.Kia Rio 5: Sporty design doesn’t

overcome safety performance.Toyota Corolla L: Best-selling compact

among worst for safety.Mitsubishi Lancer Ralliart: Sportiest

version of the Lancer sedan.Mercedes-Benz CL600: Sleek design

doesn’t overcome safety drawbacks.The study might generate some

controversy, however, because there a variety of ways to measure safety. For example, despite being ranked the least safe on the Insure.com report, the Fiat 500, with its integrated safety cage and airbags, actually earned very good scores in IIHS crash tests.

Rader said the tests don’t provide the whole story.

“The laws of physics are always in play in crashes,” he said. “Weight counts. Smaller, lighter cars are safer than they used to be, but all things being equal, people riding in bigger, heavier vehicles get more protection in crashes.”

The study relied on an analysis of personal injury protection and medical payment records, which the Insure.com researchers suggest gives a view of how passengers – rather than crash dummies – make out in the real world.

The 10 Best/Worst Vehicles for Auto SafetyAVO I D S M A L L CA R S , AC C O R D I N G T O A N E W S T U DY

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AUCTION NEWS

ACCORDING TO THE J.D. POWER AND ASSOCIATES (JDPA) 2013 Vehicle Dependability Study, today’s vehicles are more reliable than ever.

Lexus remains the king when it comes to long-term dependability, but the gap between import and domestic brands continues to close, with General Motors giving close chase to Toyota and its luxury Lexus brand.

“The continuous improvement in long-term dependability means consumers should have more confidence in three-year-old vehicles, whether they are keeping their current vehicle or shopping for a used car, truck, crossover or SUV,” said David Sargent, vice president of global automotive at JDPA.

The 2013 Vehicle Dependability Study (VDS) – based on responses from 37,000 owners of 2010 model year cars, trucks and crossovers – shows

the number of problems being reported fell five percent since the previous year’s report. On average, there were 126 problems for every 100 vehicles, or 126 PP100, down from 132 PP100 in the 2012 study. That’s the lowest figure since JDPA launched the widely-quoted measure of vehicle reliability in 1989.

Toyota’s Lexus brand topped the 2013 VDS, with a benchmark of only 57 PP100. In other words, barely half of the Lexus owners surveyed reported any problems at all. The top five was rounded out by Porsche, Lincoln, Toyota and Mercedes-Benz, in that order.

Traditionally, domestic makers have lagged behind foreign-based rivals but the gap has narrowed sharply for 2013, with Detroit manufacturers averaging 133 PP100 compared to 123 PP100 for imports. As JDPA points out, this is noticeable improvement, since as

recently as 2011 the gap was 18 points. GM vehicles, such as the Buick Lucerne, took four segment awards in the 2013 VDS, while Chrysler’s Ram brand posted the biggest improvement of any marque, improving its overall score by 52 PP100.

In terms of individual product segments, the Toyota brands as a whole – Toyota, Scion and Lexus – took seven segment awards more than any other automaker. Lexus led in two categories: the Lexus ES350 was the leader in the entry premium car category, while its RX model led the midsize premium crossover/SUV category.

General Motors was second on the list, with four individual segment awards for models including the Buick Lucerne and the Chevrolet Tahoe. American Honda took two segment wins, with Audi, Ford, Hyundai, Mazda and Nissan also grabbing awards.

The 2013 VDS delivered some significant surprises, most notably by revealing that conventional wisdom may be wrong when it comes to the reliability of all-new products.

“The perception that all-new or redesigned models can’t be as dependable as those on the market for a year or more is not accurate,” Sargent said, adding, “The rapid improvement in fundamental vehicle dependability each year is more than offsetting any initial glitches that all-new or redesigned models may have.”

The upward trend in vehicle dependability is certainly good for those looking to buy a new vehicle. But it’s perhaps even better news for those in the market for a “nearly-new” vehicle.

“If you can’t afford a new vehicle, or simply don’t want one, you should feel confident when buying a certified pre-owned (CPO) vehicle,” JDPA said in a statement.

BY PAUL A. EISENSTEIN WWW.THEDETROITBUREAU.COM

Lexus Tops Vehicle Dependability Study – But GM Narrows Gap

T O DAY ’ S CA R S , I N G E N E R A L , A R E L A S T I N G LO N G E R T H A N E V E R

American Honda took two segment wins, with Audi, Ford, Hyundai, Mazda and Nissan also grabbing awards.

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Lexus Tops Vehicle Dependability Study – But GM Narrows Gap

The automotive industry is unique in that it is one of the few in which commercial loans are abundant and relatively easy to qualify for.

Whether you are just starting out or looking to shift your business into the next gear, it is extremely likely you will be able to find the capital you need to stock your dealership. But while there is a good chance you will be able to acquire a floorplan line of credit, the size of that line of credit will vary depending on your business needs and your overall portfolio snapshot.

Floorplan 101: The BasicsFirst and foremost, to qualify for a

floorplan, you need to have established credit. Specifically, you should have a history of using and repaying debt.

Bad credit and “hiccups” on your credit report aren’t always deal-breakers, but they will likely reduce the amount you qualify for. Additionally, there is a good chance credit issues will have a negative impact on your pricing structure.

The good news is that over time, with good performance coupled with adherence to the terms and conditions of any loan agreement, you can overcome those setbacks.

It is also important that you are not overextended. If your credit cards are maxed out, that is a red flag even if you have not paid late. Handling your available credit responsibly is essential, so be sure to maintain a substantial amount of available credit.

Getting StartedThinking about opening a dealership? You

will want to set up a free consultation with the floorplan company of your choosing right away.

Even if you are well capitalized out of the gate, having a floorplan line of credit is an amazing asset that can help you seize opportunities as they arise.

If you aren’t well capitalized, you will probably be looking at starting with a smaller initial line of credit to get your business off the ground. As you turn inventory and build your reserves, submit a formal request for a credit line increase.

Growing Your BusinessIf you are looking to grow your business

through the addition of a floorplan line of credit, there are several other items that will play into the lending decision beyond your personal credit history. Trade references, business credit, equity, cash and the overall health of your business all come into the picture and become increasingly important in your effort to acquire more floorplanning dollars.

The same principles apply if you are looking to increase your existing floorplan credit limit. However, there is another component that could either work in your favor or be held against you: performance.

Commercial lenders have learned a lot about managing and mitigating risk, especially over the past several years. It is crucial to closely adhere to your lender’s terms and conditions. NSFs, late curtailments, slow payoffs and bad audits will inevitably prevent you from gaining the additional buying power you need to grow your business. Stay on top of managing your accounts and you will improve your chances of increasing credit limits.

Also, those with substantial business equity should flaunt it. To a floorplan company, inventory that is owned outright is viewed similarly to cash and is a good indicator of the viability of your operation.

Business equity exhibits an enhanced capacity to repay debt. When applying for a floorplan, take the time to validate your equity position.

Your floorplan company might ask to see the titles and bills of sale for everything you currently own. Go with it. They might even ask to physically inspect your owned inventory. That will all play into your favor, as finance companies prefer lending to people that already have money.

The more equity you have, the lower the perceived risk.

Heavy HittersWhen seeking a floorplan line of credit

in excess of $250,000, both business and

personal financials will typically need to be presented in addition to your standard business documents.

Those financials typically include:•Personalfinancialstatement(requiredfor

each owner/signer).•Personaltaxreturn(twoyears,required

for each owner/signer).•Businesstaxreturn(twoyears).•Businessbankstatements(three

months).•Incomestatement(currentandprioryear

end).•Balancesheet(currentandprioryear

end).As you can imagine, the larger the credit

line request, the greater scrutiny you and your business will be given.

Though you are welcome to provide a stack of photocopies, the best way to present your financials would be to scan them and send the digital files via email or USB thumb drive. Make sure everything is clearly labeled, and when applicable, provide more detail as opposed to less.

Anything out of the ordinary should be accompanied by a letter of explanation.

In addition to the basic requirements, or if you are requesting a large line of credit (more than $250,000) to stock a start-up dealership, you should be prepared to provide:

•Aresumeforeachowner/signer.

Presenting Your Portfolio for the Most Floorplanning Dollars

C O N T I N U E D O N PAG E 1 8

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•Photosofthedealership.•Abusinessplan.•Proformafinancialstatements.

Presenting Bank StatementsIf you have had any NSFs, they will need to

be explained in detail. Also, you want to make sure your business checking exhibits positive cash flow, meaning, in general, you have more money coming in than you have going out.

Take note of your average daily balance to see if that figure is strong enough to support the line of credit you are requesting. In an ideal world, you would have at least 20 to 30 percent of your floorplan line of credit in your business checking account at all times. If you fall short of that mark, business equity via owned inventory can help bridge the gap.

Personal Financial StatementWhen it comes to your personal financial

statement, ideally you should have some liquid assets. Cash, 401Ks, IRAs, CDs and bonds are all desirable elements to have in your portfolio because they are accessible or you may be able to borrow against them if you need to.

That is ideal because it demonstrates you have reserves in place to weather the storm should you encounter a few bad months or an unforeseen industry shift.

A word of caution: Some dealer principals place an inordinate value on the shares of their dealership in their personal financial statement. Though that might beef up your

net worth, a floorplan lender probably will not take that into consideration.

The real value of your business is predicated on what a buyer is willing to pay for it. Hence, the stated value on your personal financial statement is merely hypothetical. And bear in mind that if your dealership were to go into default, your shares probably wouldn’t be worth much at that point.

Another item to keep in mind is that if all of your assets are in the form of equities against mortgaged real estate, you might encounter difficulties with potential lenders.

Banks have become skeptical of real estate equities given the recent real estate crisis. High-dollar homes and commercial properties are slow to move and hard to appraise.

Don’t exaggerate your real estate equity on your financial statements. Be realistic. Conversely, if your property is actually worth $500,000 and you only owe $100,000 on your mortgage, that would be an entirely different story. Having minimally leveraged or free and clear real assets should comfort a lender to some extent.

Income StatementsThe income statement can be quite

revealing, and often is used to help determine what the true business need is when it comes to setting a floorplan credit limit.

For instance, if a dealer requested a $500,000 line of credit but only turned $500,000 in gross sales last year, that request

would surely be denied unless there were some major material changes in the operation that justified the increase.

Additionally, the statement shines a spotlight on the overall sophistication of the operation. If you are generating additional revenues from F&I products and repairs, for instance, that will all be itemized on the statement.

Balance SheetSimply put, the less you owe and the more

you own, the lower the credit risk. Again, banks like to lend when the probability of repayment is the highest. Having too few assets and too much debt can become a downward spiral towards insolvency.

That ties into the overall viability of your operation. A thriving business should be building equity while reducing debt. A thriving dealer principal should be building net worth, not acquiring debt to keep his business above water.

If your business isn’t building and growing, you probably shouldn’t be seeking more floorplan dollars. More flooring won’t turn around a failing business model. You would just be adding more fuel to the fire. Instead, focus on perfecting your operation.

However, if your business is building equity and turning a profit, having some additional buying power can surely help you shift into the next gear.

BY GARRETT JOREWICZ REGIONAL DIRECTOR FOR NEXTGEAR CAPITAL.

C O N T I N U E D F RO M PAG E 17

Plans to cover groups and individuals.

A promise to cover everyone.

We have a broad range of group plan options, including PPO,

Flexible Blue (HSA), HMO, Dental and Vision. We also offer

affordable individual health care for you and your family, at any

stage of your life.

Blues group and individual members have unparalleled statewide

and nationwide access to the doctors and hospitals they need.

We accept everyone, regardless of medical condition and will never

drop your employees for health reasons. Our nonprofit mission

means you can trust us to put your needs first instead of paying

dividends to stockholders. We reinvest in health care for Michigan.

Because Michigan is our home.

For more information, contact:

bcbsm.com MiBCN.com

BCBSM-Half-GroupAFIndColor.indd 1 1/10/08 9:45:52 AM

Michigan Independent Automobile Dealers Association

248-828-7010

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C F P B T O B E G I N S H A R I N G C O M P L A I N T DATA W I T H S TAT E S

THE CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) continues to expand its data gathering and sharing network. Previous issues of The Driveline have reported on the CFPB’s alliances with various state and federal agencies, their oversight authority of the major consumer reporting agencies and the establishment of their investigatory databases and consumer complaint portal. Most recently, the Bureau announced plans to share data from their complaint database with state regulatory agencies.

In other words, consumer complaints against used dealers filed at the federal level may be shared with state agencies such as the Michigan Secretary of State.

The CFPB’s stated objective is to allow multiple government agencies to work on the consumer’s behalf without the consumer having to file complaints at different levels of government. By providing real-time access to their “growing database of consumer complaints,” the CFPB says state government agencies will have a more complete picture of the markets for consumer financial products or services and be able to help more consumers in their state.

Initially, the sharing will be one-way, from the CFPB to the states, via a secure channel that protects the confidentiality of personally identifiable information. In the future, however, the CFPB plans to build ways to accept complaints and information from state agencies and to make the data available to other federal agencies, state attorneys general, local agencies, congressional offices and other governmental agencies.

Eventually, according to their announced plan, the CFPB will essentially become a clearinghouse for consumer complaints against the financial industry, with broad authority to access commercial databases at financial institutions and consumer reporting agencies and with multi-directional data flow between state and federal agencies.

CFPB Expanding Complaint Network

TONY LOBRETTO, OWNER OF ALAMO VALLEY AUTO SALES in Kalamazoo, will represent Michigan at the upcoming NIADA Convention as the state’s 2013 Quality Dealer of the Year.

Lobretto has been involved with cars since his days selling used parts as a high schooler. He took to racing cars as a 20-year-old in 1974 and won the Kalamazoo Speedway track championship in ’75. By the mid-80s, he was buying and selling cars on a part-time basis for an independent dealership.

Lobretto opened his own dealership, Alamo Valley, in 1997, and built the business literally from the ground up, constructing the building as well as the inventory and the clientele. He said his one-man operation survived the rough economic times by adjusting his inventory and “maintaining fair and honest sales.”

“Every transaction and interaction is based on fairness and honesty,” he said. “I ask myself, ‘Would I let my 16-year-old daughter drive this car and feel she would be safe?’ ”

Lobretto, a finalist for the 2012 NIADA/Manheim National Community Service Award, has served as a volunteer firefighter for 27 years. His community work also includes organizing a local classic car show to benefit the area’s Little League program and parks, and support for veterans through Lest We Forget Our Vets, Inc., and Fisher House, which provides lodging for the families of veterans receiving treatment at military medical centers.

Lobretto will represent Michigan as a nominee for the National Quality Dealer Award, which will be presented at the NIADA Convention & Expo in June in Las Vegas.

Congratulations to Michigan Quality Dealer of the Year Tony Lobretto!

2013 State Quality Dealer: Tony Lobretto

A S S O C I AT I O N N E W S

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ICHIGA IDEPEDET AUTBIE DEAERS ASSCIATI Servig the Idustry Sice 1981

Mail or Fax to: MIADA, 55 E. Long Lake Rd., #233, Troy, MI 48085 Fax: (248) 828-7012

TYPE OF MEMBERSHIP YOU ARE APPLYING FOR (CHOOSE ONE): Regular Associate*

Dealership Contact Name(s) Street Address Mailing Address City City State Zip - State Zip - Telephone ( ) Cell/Pager ( ) Fax ( ) E-Mail Address Dealer in: Used Others New Describe License # Sponsor ____________________________________________

Applicantʼs Signature(s) X Date *Associate membership may be held by a person, firm, or corporation engaged in a business allied with or deriving benefit from the automotive industry.

Please Check One Payment Option. $250 Paid i Fu by Chec ey rder r Credit Card □ Discover □ Visa □ MasterCard □ Amex □ Check Card # CSCode Exp. Date Amount $250.00 Credit Card Billing Address Cardholderʼs Signature Tw (2) Istaets f $13000 (avaiabe y fr Credit Card Payets)

□ Discover □ Visa □ MasterCard □ Amex Card # CSCode Exp. Date Amount $ Credit Card Billing Address Cardholderʼs Signature

** Credit Card will be charged upon receipt, then again 30 days later. By choosing the installment option you authorize MIADAʼs Management Company, AEC, Inc., to debit your credit card for both installments. A $5 administration fee for installment is included.

AUA DUES ARE $25000 (ICUDES DUES I IADA)

55 E g ae Rd PB 233 Try ichiga 48085

(248) 8287010 Fax (248) 8287012 Eai chapa@iadarg Visit ur Website at wwwiadarg

A Assciati f ad fr the ichiga Used Car Deaer! This is ur persa ivitati t i the ichiga ad atia Idepedet

Autbie Deaers Prfessia Assciati

YES it is iprtat t e t be recgied as a prfessia! Ecsed are y aua dues f $250 t ae sure that y busiess has a the advatages IADAIADA prvides t e t put e at the frefrt f y prfessi By cpetig this fr I a csetig t ad givig IADAIADAAEC Ic its affiiates ad subsidiaries y perissi t (uti I give writte tice t disctiue) ctact e ad prvide ifrati t e at the aiig ad eai addresses teephe ad fax uber(s) I have prvided I certify that (I a r we are) eigibe fr ebership i IADA I agree up the sigig f this appicati ad if accepted as a eber t uphd the Byaws ad the Cstituti f the Assciati its Cde f Ethics ad a ca State ad Federa aws pertaiig t the Autbie Busiess

Member Benefits

Auction Discounts VIP Auction Discount Cards at auctions throughout

Michigan, Ohio & Wisconsin

Business Savings FedEx Office HP business product discounts OfficeMax product discounts Biz Filings discounts CheckToHire discounts CompuPay payroll discounts

Business Utilities Savings Affiliated Power Purchasers Int’l

Credit Card NIADA Visa Platinum Credit Card Program

Certified Pre-Owned Program Through NIADA

Credit Report Savings ProCredit Express

Dealership Accounting Tools NIADA Dealership Accounting Manuals

Education & Camaraderie Local chapters provide town-hall style meetings, show-

case guest speakers, presentations and complimentary meals while networking with member dealers and ven-dors

Certified Master Dealer Program NIADA.tv NIADA’s Annual Conventions, Education and Exposi-

tion

Electronic Titling/Registration CVR

Financing Solutions Auto Portfolio Services, LLC RouteOne Vehicle Acceptance Corporation

Forms Savings Mandatory Forms discount program

Franchise Opportunities Rent-A-Wreck Used Car Rental and Leasing

Hotel Savings Choice Hotels International

Insurance Products/Savings Blue Cross Blue Shield of Michigan Lot Liability & Garagekeepers Insurance program Dealer bond discounts for qualified members Berkshire Risk Services Long Term Care Financial Partners

Internet Applications Auto Search Technologies, Inc. Auction Genius AutoFlipr

Reach the MIADA 24 hours a day, seven days a week at

www.miada.org

Telephone Assistance to members at (248) 828-7010

*Benefits subject to change without notice

Legislative Information Legislative Representation in Lansing by Public Affairs

Associates Updates on laws and regulations

Parts and Service Discounts AutoZone

Payment Processing Discounts TransFirst PayNearMe FIS

Prescription Drug Savings Enhanced Benefits Card

Publications The Driveline - the official publication of the MIADA Used Car Dealer Magazine

Repair & Diagnostic Services PH2 Solutions

Retirement Program NIADA’s Retirement Program administered by NA-

DART

Scholarship Opportunities Annual Scholarships awarded to eligible family mem-

bers on a regional and state-wide basis NIADA Scholarship Programs

Shipping Services Savings FedEx YRC Freight

Skip Tracing Skip-Tracing & Repossession Assistance on a nation-

wide basis

Software Solutions Dealer Management System discount program through Genesys Systems Inc.

Special Products & Services Portfolio vehicle service contracts SiriusXM satellite radio Anytime Sales Training Series Online Course Discounts

Telecommunications Discounts InterCall Audio/Web conferencing discounts

Title/Salvage Verification CheckThatVIN CARFAX Experian Automotive

Vehicle Pricing Guide Discounts NADA

Vehicle Sales Leads Service Dealix Usedcars.com

Vehicle Transport Service Savings ShipCarsNow uShip

MI_0413.indd 20 3/22/13 2:19 PM


21


Member Benefits

Auction Discounts VIP Auction Discount Cards at auctions throughout

Michigan, Ohio & Wisconsin

Business Savings FedEx Office HP business product discounts OfficeMax product discounts Biz Filings discounts CheckToHire discounts CompuPay payroll discounts

Business Utilities Savings Affiliated Power Purchasers Int’l

Credit Card NIADA Visa Platinum Credit Card Program

Certified Pre-Owned Program Through NIADA

Credit Report Savings ProCredit Express

Dealership Accounting Tools NIADA Dealership Accounting Manuals

Education & Camaraderie Local chapters provide town-hall style meetings, show-

case guest speakers, presentations and complimentary meals while networking with member dealers and ven-dors

Certified Master Dealer Program NIADA.tv NIADA’s Annual Conventions, Education and Exposi-

tion

Electronic Titling/Registration CVR

Financing Solutions Auto Portfolio Services, LLC RouteOne Vehicle Acceptance Corporation

Forms Savings Mandatory Forms discount program

Franchise Opportunities Rent-A-Wreck Used Car Rental and Leasing

Hotel Savings Choice Hotels International

Insurance Products/Savings Blue Cross Blue Shield of Michigan Lot Liability & Garagekeepers Insurance program Dealer bond discounts for qualified members Berkshire Risk Services Long Term Care Financial Partners

Internet Applications Auto Search Technologies, Inc. Auction Genius AutoFlipr

Reach the MIADA 24 hours a day, seven days a week at

www.miada.org

Telephone Assistance to members at (248) 828-7010

*Benefits subject to change without notice

Legislative Information Legislative Representation in Lansing by Public Affairs

Associates Updates on laws and regulations

Parts and Service Discounts AutoZone

Payment Processing Discounts TransFirst PayNearMe FIS

Prescription Drug Savings Enhanced Benefits Card

Publications The Driveline - the official publication of the MIADA Used Car Dealer Magazine

Repair & Diagnostic Services PH2 Solutions

Retirement Program NIADA’s Retirement Program administered by NA-

DART

Scholarship Opportunities Annual Scholarships awarded to eligible family mem-

bers on a regional and state-wide basis NIADA Scholarship Programs

Shipping Services Savings FedEx YRC Freight

Skip Tracing Skip-Tracing & Repossession Assistance on a nation-

wide basis

Software Solutions Dealer Management System discount program through Genesys Systems Inc.

Special Products & Services Portfolio vehicle service contracts SiriusXM satellite radio Anytime Sales Training Series Online Course Discounts

Telecommunications Discounts InterCall Audio/Web conferencing discounts

Title/Salvage Verification CheckThatVIN CARFAX Experian Automotive

Vehicle Pricing Guide Discounts NADA

Vehicle Sales Leads Service Dealix Usedcars.com

Vehicle Transport Service Savings ShipCarsNow uShip

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FORMS AMOUNTS UNIT PRICE QUANTITY TOTAL

RD-108, 4-Part NCR 50 250 500

12.75 60.00 115.00

Imprinted RD-108, black ink 250 500

145.00 205.00

Privacy Forms (Complete FTC Worksheet online at: www.buyadr.com)

FTC Buyers Guide, 2-Part NCR, with adhesive

100 500

15.50 72.50

FTC Spanish Buyers Guide, 2-Pt NCR, with adhesive

100 500

14.00 65.00

Deal Jacket Envelopes 9” x 12”

100 500

22.25 101.25

Odometer Forms 3-Part NCR

100 500

11.75 53.75

“Police” Record Book per book 30.00

MI Retail Purchase Agreements 3-Part NCR

100 500

25.00 110.00

Imprinted MI Retail Purchase Agreement, 3-Part NCR, black ink

500 1000

241.75 341.75

MI Retail Lease Agreement 3-part NCR 100 25.00

HARDWARE AMOUNTS UNIT PRICE QUANTITY TOTAL

Thumb Screws 50 12.50

Pan Head Screws 100 8.00

Hex Head Screws 100 9.00

Metric Screws 100 8.00

License Plate Magnet, Extruded Rubber each 9.00

BOOKS AMOUNTS UNIT PRICE QUANTITY TOTAL

NADA Used Car Guide 1 book 8.00

NADA Older Car Guide 1 book 30.00

NADA Recreation Vehicle Guide 1 book 45.00

NADA Marine Appraisal Guide (7-100’) 1 book 45.00

NADA Motorcycle-Snowmobile Guide 1 book 30.00

NADA Classic Car Guide Book 1 book 30.00

ADVERTISING SUPPLIES AMOUNTS UNIT PRICE QUANTITY TOTAL

Grease Pencils - Yellow or White each 1.00

“Jumbo Line” Waterbase Markers Fluorescent Colors - Red, White, Yellow or Blue

each 10.00

“Broad Line” Waterbase Markers Fluorescent Colors - Pink, Green, Yellow or Orange

each 7.00

Please see website for prices.

ADVERTISING SUPPLIES AMOUNTS UNIT PRICE QUANTITY TOTAL

“Medium Line” Waterbase Markers Fluorescent Colors - White, Red, Yellow, Black or Blue

each 6.00

Windshield Numbers Peel & Stick 7-1/2” - Neon Green: “$”, “0” thru ”9”

per dozen 3.25

Slogan Signs: 15” Neon Green: 0 Down, 4-Cylinder, 4x4, 6-Cylinder, Air Conditioning, All Wheel Drive, Automatic, Certified, Diesel, Down, Extra Clean, Financing Available, Gas Saver, Great Gas Mileage, Lease, Leather, Like New, Loaded, Low Mileage, One Owner, Per Month, Reduced, Sharp, Special, V-8, War-ranty

per dozen 3.50

Year Model Slogan Oval

“2004” Red/Yellow or Green/Black per dozen 7.50









Mirror Tags: Fluorescent Colors: As Advertised, Lease - Pink or Yellow Blank - Green, Red, Pink, Yellow Red Tag Special, Was/Now - Red Sale - Green, Red, Pink, Yellow Special - Green, Red, Pink, Yellow

pack of 50 18.50

Antenna Flags: Fluorescent Colors Yellow, Multi, or Red

per dozen 21.00

American Clip on Flags per dozen 21.00

Pennants: 120 ft. String Multi-Color each 21.00

SUPPLIES AMOUNTS UNIT PRICE QUANTITY TOTAL

Key Tags - Blue Cardboard Yellow Hard Plastic “Versatags” - Red, White, Blue, Green or Yellow

500 250 250

35.00 21.00 27.00

Red Stock Stickers 100 8.00

Single Edged Razor Blades box of 100 8.00

Metal Scraper each 2.50

Rubber Plate Holders each 12.00

Snow Rakes each 17.00

REV. 8/8/2012 PAGE 1 SUBTOTAL

PAGE 1

□ MasterCard □ VISA □ Discover □ American Express

ADDRESS

Date of Order ADR of Michigan 55 E. Long Lake Rd., PMB 233, Troy, MI 48085

www.buyadr.com 888-855-0100 · Fax: 888-855-7111

NOTE: Payment must accompany your order. MI sales tax will be added to all orders. Prices are subject to change without notice. Please allow 2-3 weeks for customized orders. Make check payable to: ADR of Michigan

SHIP TO NAME

CITY, STATE, ZIP CODE

(AREA CODE) PHONE (AREA CODE) FAX

Credit Card Charge to:

Credit Card Account Number:

Signature (required for credit cards only)

ORDER ONLINE, BY PHONE, FAX, OR MAIL

IS THIS A RESIDENTIAL ADDRESS? YES___ NO___

Available Online at: www.buyadr.com

Billing Address:____________________________________________________________

Name on Card:_____________________________________________________________

Exp. Date:_________________________ Customer Security Code (CSC):_____________

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PAGE 2

ADDITIONAL FORMS AMOUNTS UNIT PRICE QUANTITY TOTAL Customer Proposal - 2 Part: Provides info the dealer-ship needs to complete a transaction.

100 $25.00

Trade-In Vehicle Appraisal - 2 Part: Ensures informa-tion is available to represent vehicle for sale.

100 $25.00

Test Drive Agreement - 2 Part: Obtains important cus-tomer information, including insurance coverage.

100 $25.00

Good Will Repair Acknowledgement - 2 Part: Protects the dealer’s ability with regard to implied warranties.

100 $25.00

Wholesales Purchase Agreement - 2 Part 100 $25.00 Acknowledgement of AS-IS Sale - 2 Part: Verifies that the consumer is satisfied with vehicle & understands the transaction.

100 $25.00

Delivery Confirmation - 2 Part: Verifies that the con-sumer is satisfied with the vehicle and understands the transaction.

100 $25.00

Delivery Confirmation-S: Spanish version of the above form.

100 $25.00

Delivery Confirmation-F: Other foreign language ver-sions of the Delivery Confirmation.

100 $25.00

Interpreter’s Acknowledgement - 2 Part: For use when sale is conducted in language other than English

100 $25.00

Customer Delivery Checklist - 2 Part: Records existing rights and/or responsibilities of the parties.

100 $25.00

Notice to Co-Signer - 2 Part: Discloses the obligations they are undertaking by agreeing to act as a co-signer.

100 $25.00

Insurance Coverage Acknowledgement - 2 Part: Con-firms customer’s obligation to maintain insurance cov-erage.

100 $25.00

F & I Product Confirmation - 2 Part: Confirms which products the consumer purchased.

100 $25.00

Authorization to Release Payoff Info - 2 Part: Dealer-ship can get protected information concerning a lien release.

100 $25.00

Used Vehicle Limited Warranty - 2 Part: Enables the dealership to sell a vehicle with a “Limited” warranty.

100 $25.00

Deposit Receipt - Documents transaction information required to comply with UDAP statutes

200 $21.00

Arbitration Agreement 100 $25.00

Service Loaner Agreement 100 $25.00

Acknowledgement of Voluntary Resign 100 $25.00

SUBTOTAL: PAGE 2

SUBTOTAL: PAGE 1

TOTAL

*FREIGHT

**GRAND TOTAL

MIADA MEMBER DISCOUNT (10%)

* UPS Freight Charge will be added onto order. (for a freight quote, please call)

**Complete Payment Information on the Top of Page 1

Now View Products & Place Orders Online! Visit Us at: www.buyadr.com

www.buyadr.com www.buyadr.com

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DEALER ORDER FORM

Wolters Kluwer Financial Services/Bankers Systems Inc. Retail Installment Contracts & Security Agreements

(when placed through ADR of Michigan only)

New Lower Pricing

Simple Interest without Late Fee (RS-SI-MV-MI)

Quantity* Pricing

Through ADR of MI † Quantity Subtotal 6% MI Sales

Tax Simple Interest

without Late Fees

Total

50 $45.00

100 $87.00

200 $170.00

Simple Interest with Late Fee (RS-SI-MVLF-MI); with Arbitration (RS-SI-MVLFA-MI)

Quantity* Pricing

Through ADR of MI † Quantity Subtotal 6% MI Sales

Tax Simple Interest with

Late Fee

Total

50 $45.00 100 $87.00 200 $170.00

* Larger quantity quotes available upon request.

* Larger quantity quotes available upon request.

Shipping Information

ADDRESS

SHIP TO NAME

CITY, STATE, ZIP CODE

(AREA CODE) PHONE (AREA CODE) FAX

IS THIS A RESIDENTIAL ADDRESS? YES___ NO___

MAIL TO: ADR of Michigan, 55 E. LONG LAKE RD PMB 233, TROY, MI 48085 FAX TO: 888-855-7111

PHONE ORDERS: 888-855-0100 ORDER ONLINE: www.buyadr.com

† WKFS shipping and handling will be charged separately.

Prices are subject to change without notice

EMAIL ADDRESS

Payment Information

□ MasterCard □ VISA □ Discover □ American Express

Credit Card Charge to:

Credit Card Account Number:

Signature X______________________________________________

Billing Address:___________________________________________________________

Exp. Date:________________________ Customer Security Code (CSC):_____________

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COMPLIANCE OVERDRIVE

Common Mistakes Can Wreck Lender Relationships ONE OF THE MOST IMPORTANT KEYS to

a successful dealership is strong relationships with lenders. You may regularly get advice on what you can do to build and improve these relationships, but as a dealer, what shouldn’t you be doing?

Many common problem areas can be traced back to financing documentation. First and foremost, dealers cannot forget they are responsible for retail sales contracts as the original creditor – even if they plan to subsequently assign the contracts to a lender. In fact, dealers may sometimes hear the term “assignee” instead of “lender,” highlighting the fact they are assigning a contract for which they are originally responsible.

If a dealership manages the loan documentation process poorly, it may not be able to assign the contract to anyone. Or, if the contract is assigned, it might have to be bought back later because of documentation defects.

Remember, when financing a sale, the dealer – as the original creditor – needs to be as careful, accurate and complete as possible. That attention to detail will help the dealership if it intends to hold the paper, and will also improve relationships with lenders to whom the contracts are assigned.

But how do you avoid creating contracts your lender (assignee) refuses to buy? The simplest answer is just to avoid some of the most common mistakes cited by lenders, including:

Charging incorrect fees, such as fees paid to public officials and documentation fees: States often authorize dealers to charge fees with specific names and in specific amounts for processing documents or other activities. You need to be aware of the fees allowed in your state, the amounts allowed for those fees and when they can be charged.

Charging fees that aren’t specifically authorized can create problems for you (the original creditor) and also cause a lender to refuse to buy your completed contracts. You also need to stay current on the fees required for submitting title applications and other official fees.

Usually, it’s fairly easy to confirm and use up-to-date fee information so you stay in your lender’s good graces.

Contracting with outdated form versions or noncompliant forms: Most lenders conduct a legal review of popular base forms used for retail motor vehicle sales transactions. Lenders then require use of a retail sales form that has been reviewed and approved so they only need to review the financial terms and completion fields when an executed contract is assigned.

Retail sales forms are revised with some regularity in response to state and federal law changes as well as changes in market

requirements. As a result, lenders regularly cull their lists of pre-approved forms to remove outdated or noncompliant versions.

If you use an outdated/noncompliant form, your lender will not buy the executed contract. Your lender may also refuse to buy an executed contract on a base form it hasn’t already reviewed and approved. As a result, you should always use the current, lender-approved versions of forms.

Improperly listing collateral: When you finance the sale of a motor vehicle, you take a secured interest in the vehicle sold. If a buyer defaults on the terms of the retail sales agreement, one remedy available to you (or the assignee/lender) is to repossess the vehicle.

The right to repossess the vehicle is a huge risk mitigation tool for a creditor and a huge factor motivating the buyer to avoid default. However, it might be difficult or impossible to repossess a vehicle if the retail sales contract doesn’t include enough information about the vehicle, such as the VIN or other key identifying information.

Lenders’ funding decisions are also affected by whether a vehicle is a “Limited Edition,” has automatic or manual transmission, alloy wheels, etc. An accurate and complete description of the vehicle and its extra features is critically important for the lender to analyze the transaction.

With such high stakes, it’s understandable that lenders require the vehicle description to be accurate and complete. Remember, lenders may also do post-sale audits with buyers to make sure the vehicle’s features are accurately described in the retail sales contract. If the vehicle’s features and condition were exaggerated, the lender may require you to buy back the transaction.

Improperly disclosing trade value or cash down payments on contracts: A critical promise dealers make to lenders/assignees is that the retail sales contract is an accurate report of all financial terms of the sale. The lender/assignee isn’t in the dealership to oversee the transaction, so it relies on the dealer to fully and accurately describe it.

If that trust is violated on just one transaction, it can affect the entire business relationship between the dealer and lender/assignee. As a result, it is critically important you understand and accurately report all the fees and charges, especially in the “Itemization of Amount Financed” section of a retail sales contract.

An obvious deal killer for a lender is if the dealer fails to report all cash received from the buyer or manipulates the agreed-on value of a trade-in vehicle. For example, if a lender discovers a buyer paid additional cash not reported by the dealer, it will result in a rejection of that transaction and also call

into question the dealership’s integrity on all other transactions.

Failing to provide signed disclosure forms in the finance package: In addition to federal notices and disclosures, every state has its own requirements for consumer retail sales transactions. Some disclosures and provisions require separate buyer or dealer initials or signatures.

It’s easy to forget or overlook acknowledgement provisions during the signing process. If any required acknowledgments are not initialed or signed, the retail sales contract has a compliance problem.

A lender will not buy – and will return to you – any contract missing required initials or signatures. Before the buyer drives away, double-check to ensure you have collected all required initials and signatures on all finance package documents.

Problems can also result from general data entry errors within loan packages, so be sure your sales transaction documents don’t have any typos. Technology can greatly improve manual data entry errors, but if you’re using a software system to generate and print your forms, always check to ensure the system is computing everything correctly. You may even want to consider a loan documentation audit and review process for each deal.

Although we are focusing on common mistakes made by dealers, it’s important to remember lenders aren’t perfect either. In fact, as you work with your lender partners, there are areas in which you can seek their help to make the process easier.

For example, have they made their program guidelines clear and accessible, and do they readily provide instructions for dealers regarding the completion of contracts? If so, do their instructions include information regarding calculation methods and how payments should be disclosed?

One of lenders’ biggest concerns is whether or not dealers represent consumer information and transactions accurately and honestly. So dealers who make an effort to avoid documentation mistakes will find it easier to gain the trust of lenders.

Remember: lenders want to help make the process smoother, too. Consider monthly or quarterly meetings with your lending partners to discuss how portfolios are doing, address any concerns that might hinder the relationship, and determine what both parties should – and should not – be doing to make sure the relationship remains a positive and profitable one.

BY CHIP ZYVOLOSKICHIP ZYVOLOSKI IS A SENIOR ATTORNEY FOR INDIRECT LENDING AT WOLTERS KLUWER FINANCIAL SERVICES. FOR MORE INFORMATION, VISIT WWW.WOLTERSKLUWERFS.COM/INDIRECT.

M A N Y C O M M O N P RO B L E M A R E A S CA N B E T R AC E D B AC K T O F I N A N C I N G D O C U M E N TAT I O N .

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