Title BasicsMinneapolis

Certified TitleMinneapolis

At our 2014 Annual Meeting, MADA announced it will be launching a leadership development program for our industry’s next generation of leaders. Led by Cindy Wagener Robin as honorary chair, the program will offer participants the opportunity to develop as future leaders not only in the industry, but also in their local communities.A priority for the first year is to introduce future dealer principals and general managers to the work that happens outside of the dealership, which can impact their bottom line. NextGen Program Director Amber Backhaus outlined government actions – driven by public perceptions about auto dealers – that can have make-or-break consequences for the industry (think Congressional intervention to prevent unlawful dealer terminations or Minnesota’s efforts to curb abuse by local governments that take dealerships via eminent domain.)Dealers in the NextGen program will develop a network of like-minded peers and an arsenal of resources, including MADA itself, which can help them navigate and influence the regulatory and legislative processes. If you are in line to take over management of your dealership and are interested in participating, please contact us. You can also nominate someone you know to Amber Backhaus at amber@mada.org. The program will kick off in June of 2015 and will include four opportunities to network and grow. Watch your mailbox for more details!

NewsDecember 2014

insideMet Council Push

Check New Year Changes

New MADA Officers

Council Membership Due

Title Transfer Rules

Scott Lambert, Executive Vice President • 200 Lothenbach Ave. • West St. Paul, MN 55118 • (651) 291-2400 • 1-800-652-9029 • FAX (651) 291-2894

visit www.mada.org

for details, registration and a complete list of Upcoming Events and

Training

MADA News

WANTED: NextGen Leaders MADA Announces Program for Industry Up-and-Comers

upcoming events

We hope to provide participants the opportunity to develop as future

leaders not only in the industry, but also in their local communities.

13jan

13jan

December 2014 / Page 2

The Minnesota Automobile Dealers Association is a non-profit trade association dedicated to the progress of the retail auto

industry in Minnesota.President Greg House, House Chevrolet, Stewartville President-Elect Mike Saxon, Inver Grove Ford Lincoln, Inver Grove Heights Treasurer Rick Jensen, Jensen Motors, Inc., New Ulm Secretary Michael Stanzak, Key Cadillac, Inc., Edina Executive Vice President Scott Lambert, MADA Executive Vice President

200 Lothenbach Avenue • West St. Paul, MN 55118Metro: 651-291-2400 • Toll Free: 800-652-9029

FAX: 651-291-2894 • Web site: http://www.mada.org

Minnesota Driver and Vehicle Services asked MADA to remind dealers of their obligation to handle title transfers and taxes for their Minnesota retail customers. Minnesota Administrative Rules require dealers to complete a title and registration application and submit the application along with the excise and registration taxes and all applicable fees to the registrar within ten days of the sale of the vehicle except:If the purchaser is not a Minnesota customer, the dealer is not required to complete an application or submit the application, taxes, and fees.If the purchaser is eligible to pay a prorated tax and provides a prorate account number to the dealer, the dealer must complete and file a title application, but the dealer is not required to collect and submit either the excise or registration tax.The dealer must retain on file for three years an itemized receipt stamped as paid by a deputy registrar showing a breakdown of the taxes and fees for the transaction.

Legal News

Dealers Must Submit Title Transfers

C&S Council News

Council Membership Drive is On

It was just two years ago that MADA launched the Council to help promote

and support your service and collision shops and we are quickly establishing a presence in the industry.

Today the Council is asking for your continued participation and will be sending a letter to renew your membership. Annual dues are $125 for the first rooftop member and $25 for each subsequent member. Non-members will be asked to join over 170 members to keep our momentum going. There is strength in numbers; together, we can make great strides for our dealership fixed operations. Use this link to sign up now online: http://bit.ly/1z9c9WG

“Nobody knows your car better than your dealer”

A BIG THANK YOU to our generous 2014 Annual Meeting sponsors!

Gold Sponsors:

Silver Sponsors:

December 2014 / Page 3

2014

The 2014 event drew record attendance to the Hyatt Hotel Dec. 5.

December 2014 / Page 4

Time to take notice of the annual payroll adjustments that come with the new year.The Social Security Administration announced the wage base for social security payroll taxes for calendar year 2015. The following table shows the rates and bases applicable for 2015 and 2014 respectively:

Wage Base 2015 2014 Employee Tax Employer TaxOld Age, Survivors, Disability Tax

$118,500 $117,000 6.20% 6.20%

MedicarePart A

All WagesNo Limits

All WagesNo Limits

1.45% 1.45%

Medicare Tax for High Earners Continues in 2015The 0.9% Medicare Tax which first went into effect in 2013 continues in 2015. Employers are required to withhold the tax on earnings over $200,000 during each calendar year. Even though an employer’s obligation to withhold begins at $200,000, employees may owe more or less tax depending on their filing status. There’s no employer match to this tax.

Current Minimum Wage Stands at $8.00 and Moves to $9.00 on Aug. 1, 2015Minnesota dealers are subject to both State and Federal minimum wage laws and are required to pay the minimum wage most favorable to their employees. Since August 2014, the Minnesota rate has been higher and currently stands at $8.00 per hour. The minimum wage rate will move to $9.00 per hour effective Aug. 1, 2015.For youths who are 17 years old and younger, the minimum wage is $7.25 per hour and is not scheduled to change in 2015.The law provides a lower minimum wage for new employees under the age of 20 during the first 90 days of their employment. This temporary youth minimum wage rate is currently $6.50 per hour and moves to $7.25 per hour effective Aug. 1, 2015.

Vehicle Old Age ExemptionsMinnesota Used Car Warranty Law A variety of exclusions are provided in Minnesota’s Used Car Warranty Law, including one for “vehicles that are eight years of age or older as calculated from the first day in January of the designated model year of the vehicle.”On Jan. 1, 2015, model year 2007 vehicles turn eight years old and are exempt from the law.

Minnesota Used Car Damage Disclosure and Branding Laws These laws only apply to vehicles that have a “manufacturer’s designated model year equal to or greater than the fifth calendar year immediately preceding the current calendar year.”On Jan. 1, 2015, model year 2010 and newer vehicles will be covered. 2009 and older will be exempt.

Odometer Disclosure Requirements The Federal Odometer Regulations contain an exemption from the disclosure requirements for vehicles that are 10 years old or older. The Minnesota Department of Public Safety administers the exemption on a calendar year basis. Effective Jan. 1, 2015, model year 2005 vehicles turn 10 years old and will be exempt.

Legal News

Social Security Wage Base and Tax Rates for 2015

December 2014 / Page 5

For the past year, auto dealers in Bloomington, Minnesota have been fighting proposed zoning changes that would severely restrict their ability to improve and upgrade their facilities. The “Penn-American District Plan,” as envisioned by the city, would redevelop a successful stretch of retail located adjacent to the interstate into a high-density, pedestrian-friendly area. To accomplish its vision, the city had proposed categorizing local dealerships as nonconforming uses, which would have called into question the dealerships’ ability to lawfully conduct business as usual. As this newsletter goes to press, the city has backed away from rezoning the dealerships as nonconforming uses. However, the city continues to contemplate a measure requiring dealerships to more than quadruple their square footage if they expand or rebuild, a proposal that is financially unfeasible for dealers.The impetus for Bloomington’s plan is new land-use and transportation goals put forward by the Met Council, which is drafting guidance to prioritize where it plans to fund future development projects. The City of Bloomington is slated to be part of a new bus rapid transit

corridor and wants to maximize its chances of receiving local and federal funding for the project. Accordingly, it is looking to promote land uses that it deems as more “transit-supportive.” Unfortunately, city planners and certain members of the Met Council view auto dealerships as incompatible with their vision.

As a result, MADA has been working with the affected dealers to educate the public and council members about the value dealerships bring to the local community, in terms of jobs, local revenue – even potential transit riders. Our efforts have helped slow down and reframe the Bloomington rezoning process. On a larger scale, the association is evaluating the Met Council’s proposed guidance and contemplating a strategy to ensure that existing and thriving car businesses are not prohibited from Met Council land-use planning recommendations in the seven-county metro. Stay tuned as developments on this issue unfold.

Legislative News

Met Council Push Putting Dealers at RiskBloomington City Council is First to Test the Waters

Unfortunately the city planners…view auto dealerships as incompatible with their vision

“Before”: the current district land use

“After”: the planners’ vision

December 2014 / Page 6

Billion Auto, with dealerships in Iowa, Montana, and South Dakota, agreed to settle charges that it violated a 2012 Federal Trade Commission (FTC) administrative order. The 2012 order prohibits Billion Auto from misrepresenting material costs and terms of vehicle finance and lease offers and requires specific disclosures mandated by Federal Truth in Lending and Truth in Leasing regulations. Billion agreed to pay $360,000 in civil penalties to settle the FTC’s charges.According to the FTC complaint, the dealerships

violated the 2012 FTC administrative order by frequently focusing on only a few attractive terms in their ads while hiding others in fine print, through distracting visuals, or with rapid-fire audio delivery. For example, some dealership ads promoted low monthly payments or attractive annual percentage rates and finance periods, while concealing other material items, such as low payments were for leases, not sales; major limits existed on who could qualify for discounts; and offers often included significant added costs.

Legal News

Billion Auto to Pay $360,000 for Advertising Violations

When the Minnesota Legislature convenes in St. Paul on Jan. 6, almost 20% of the representatives will be beginning their first terms. As a result, MADA staff and members have been getting to know the newly-elected officials and educating them about our industry. Thanks to the Snell Automotive Group for hosting Representative-Elect Jack Considine (DFL-Mankato) and New

Ford Prague for meeting with Representative-Elect Bob Vogel (R-New Market-Elko). If you are interested in hosting your local legislator for an introductory meeting, please don’t hesitate to contact MADA Director of Government Affairs Amber Backhaus, 651.789.2949 or amber@mada.org.

This year’s MADA Annual Meeting featured the first-ever “Dealers Deliver Silent Auction” to benefit the MADA Foundation, which supports automotive education programs in our state’s high schools and technical college system.Our members put forward 28 incredible silent auction items, and the bidding was fierce. With over 475 offers made during the course of the

meeting, we grossed $10,292 to benefit the work of the MADA Foundation. Thank you to all of our members who so graciously donated items and partook in the auction. We hope to grow this event next year, so we can continue to grow a healthy and qualified workforce.

Foundation News

Dealers Delivered at Inaugural MADA Foundation Silent Auction

Legislative News

Dealers Meet New Legislators

December 2014 / Page 7

Greg House of House Chevrolet became MADA President. At the MADA Board meeting held Dec. 4, Michael Saxon of Inver Grove Ford Lincoln was named MADA President-Elect. Other MADA Board officers are Treasurer Rick Jensen of Jenson Motors, Inc. and Secretary Michael Stanzak of Key Cadillac. Morrie Wagener was recognized for his service as president. He will become the immediate past president and in that role, continue to serve on the 2015 Board.

MADA News

New MADA officers

MADA President Greg House

MADA President-Elect Mike Saxon

MADA Treasurer Rick Jensen

MADA Secretary Michael Stanzak

MEMBER BRUNCHOPEN-HOUSE

SUNDAY, JANUARY 25 11:00 AM - 2:00 PM

CROWN ROOM AT THE

FAIRMONT HOTEL

950 Mason StreetSan Francisco, CA 94108

1-415-772-5000

at the San Francisco

NADA CONVENTION & EXPO

December 2014 / Page 8

EducationFax Registration

For Information on these classes or to register online go to www.mada.org/training

FAX REGISTRATION TO: 651-291-2894Denise Anderson denise@mada.org

The Certified Title & Registration Program

Class Options Circle Preferred Date LocationSales Tax9:00 a.m. - 10:00 a.m. $129 January 13, 2015

Doubletree by Hilton - Park Place1500 Park Place BlvdMinneapolis, MN 55416

New to Fleet 10:30 a.m. - 12:30 p.m. $129 January 13, 2015

Minnesota Titles and Transfers1:00 p.m. – 3:00 p.m. $129 January 13, 2015

Name__________________________________________ Title____________________________

Name__________________________________________ Title____________________________

Dealership______________________________________ Customer ID #____________________

Address________________________________________________________________________

Phone______________________________ E-mail______________________________________

Title Basics

Class Options Circle Preferred Date Location

Title Basics – Minneapolis9:30 a.m. - 11:30 a.m. $199 January 13, 2015

Doubletree by Hilton - Park Place1500 Park Place BlvdMinneapolis, MN 55416

faxregistration.indd 1 12/17/14 1:50 PM

December 2014 / Page 9

Minnesota New Retail Car and Light Truck RegistrationsMost Recent Two Months YTD thru Nov* YTD Market Share (thru Nov)*

10/13 &11/13

10/14 &11/14*

%change 2013 2014

%change 2013 2014 change

Industry Total 30,934 32,146 3.9% 185,200 191,597 3.5%Cars 11,858 11,206 -5.5% 76,842 71,667 -6.7% 41.5 37.4 -4.1Light Trucks 19,076 20,940 9.8% 108,358 119,930 10.7% 58.5 62.6 4.1

Japanese Brands 10,618 11,262 6.1% 63,144 67,403 6.7% 34.1 35.2 1.1Toyota 3,874 3,949 1.9% 24,045 24,192 0.6% 13.0 12.6 -0.4Honda 2,899 3,221 11.1% 17,194 17,914 4.2% 9.3 9.3 0.0Nissan 1,571 1,476 -6.0% 9,665 9,968 3.1% 5.2 5.2 0.0Other 2,274 2,616 15.0% 12,240 15,329 25.2% 6.6 8.0 1.4

Domestic Brands 16,091 16,945 5.3% 96,041 100,454 4.6% 51.9 52.4 0.5General Motors 6,913 6,979 1.0% 40,431 40,668 0.6% 21.8 21.2 -0.6Ford 6,119 6,029 -1.5% 35,407 34,993 -1.2% 19.1 18.3 -0.8Chrysler 3,030 3,893 28.5% 20,028 24,608 22.9% 10.8 12.8 2.0Other 29 44 51.7% 175 185 5.7% 0.1 0.1 0.0

European Brands 2,139 2,085 -2.5% 12,626 11,617 -8.0% 6.8 6.1 -0.7Volkswagen 1,005 1,064 5.9% 6,179 5,725 -7.3% 3.3 3.0 -0.3BMW 519 426 -17.9% 3,184 2,744 -13.8% 1.7 1.4 -0.3Mercedes 356 371 4.2% 1,769 1,903 7.6% 1.0 1.0 0.0Other 259 224 -13.5% 1,494 1,245 -16.7% 0.8 0.6 -0.2

Korean Brands 2,086 1,854 -11.1% 13,389 12,123 -9.5% 7.2 6.3 -0.9

-8.7% -9.3%

-0.9% -2.4%

-4.9% -5.0%

2.0%

7.8%

11.7% 9.4%

4.9% 5.7%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14*

% c

hang

e vs

. yea

r ear

lier

Last month in period

10.3%

10.7%

2.0%

-6.7%

-15.0% -5.0% 5.0% 15.0% 25.0%

U.S.

State

Cars

Trucks

Minnesota Auto OutlookCovering the Minnesota automotive market Data thru November 2014

Released by:Minnesota AutomobileDealers Association

Data InformationAll data represents new vehicle retail registrations in Minnesota and excludes fleet and wholesale transactions. Please keep in mind that monthly registration figures can occasionally be subject to fluctuations, resulting in over or under estimation of actual results. This usually occurs due to processing delays by governmental agencies. For this reason, the year-to-date figures will typically be more reflective of market results. Data Source: Polk.

Percent Change in Three Month Moving Average of New Retail Registrations versus Same Period Year Earlier

The graph above provides a clear picture of the trending direction of the state market. It shows the year-over-year percent change in the three month moving average of new retail light vehicle registrations. The three month moving average is less erratic than monthly registrations, which can fluctuate due to such factors as the timing of manufacturer incentive programs, weather and title processing delays by governmental agencies.*Figures for November 2014 were estimated by Auto Outlook. Data Source: Polk.

Brands included above: Domestic Brands: GM (Buick, Cadillac, Chevrolet, and GMC), Ford (Ford and Lincoln), Chrysler (Chrysler, Dodge, and Jeep). Japanese: Toyota (Toyota, Lexus, and Scion), Honda (Honda and Acura), Nissan (Nissan and Infiniti), Other (Mazda, Mitsubishi, and Subaru). European: VW (Audi, Bentley, Porsche, and Volkswagen), BMW (BMW, Rolls Royce, and MINI), MB (Mercedes Benz and smart), Other (Aston Martin, Ferrari, Fiat, Jaguar, Land Rover, Lotus, Maserati, and Volvo). Korean: Hyundai and Kia.*Figures for November 2014 were estimated by Auto Outlook. Data Source: Polk.

Percent Change in State and U.S. New Retail Light Vehicle Markets

YTD ‘14 thru November* vs. YTD ‘13

The graph above compares the change in new retail car and light truck registrations in both the state and U.S. markets. *Figures for November 2014 were estimated by Auto Outlook.Data Source: Polk.

December 2014 / Page 10

MinnesotaNew Retail Light Vehicle Registrations

Registrations Market share

YTD '13thru Nov

YTD '14thru Nov* % change

YTD '13thru Nov

YTD '14thru Nov*

TOTAL 185,200 191,597 3%Acura 1,458 1,488 2% 0.8% 0.8%Audi 1,331 1,653 24% 0.7% 0.9%BMW 2,522 2,262 -10% 1.4% 1.2%Buick 3,680 3,710 1% 2.0% 1.9%Cadillac 1,459 1,328 -9% 0.8% 0.7%Chevrolet 28,656 28,528 0% 15.5% 14.9%Chrysler 3,613 3,199 -11% 2.0% 1.7%Dodge 6,135 6,347 3% 3.3% 3.3%FIAT 287 245 -15% 0.2% 0.1%Ford 34,389 33,909 -1% 18.6% 17.7%GMC 6,636 7,143 8% 3.6% 3.7%Honda 15,736 16,422 4% 8.5% 8.6%Hyundai 6,308 5,663 -10% 3.4% 3.0%Infiniti 779 804 3% 0.4% 0.4%Jaguar 52 58 12% 0.0% 0.0%Jeep 4,946 8,266 67% 2.7% 4.3%Kia 7,081 6,475 -9% 3.8% 3.4%Land Rover 352 303 -14% 0.2% 0.2%Lexus 1,940 2,104 8% 1.0% 1.1%Lincoln 1,018 1,013 0% 0.5% 0.5%Mazda 3,957 4,110 4% 2.1% 2.1%Mercedes 1,747 1,885 8% 0.9% 1.0%MINI 662 493 -26% 0.4% 0.3%Mitsubishi 1,013 1,962 94% 0.5% 1.0%Nissan 8,886 9,208 4% 4.8% 4.8%Other 243 172 -29% 0.1% 0.1%Porsche 206 258 25% 0.1% 0.1%Ram 5,334 6,769 27% 2.9% 3.5%Subaru 7,182 9,266 29% 3.9% 4.8%Tesla 88 91 3% 0.0% 0.0%Toyota 22,105 22,078 0% 11.9% 11.5%Volkswagen 4,642 3,809 -18% 2.5% 2.0%Volvo 757 576 -24% 0.4% 0.3%

0.0 5.0 10.0 15.0 20.0

Buick

Volkswagen

Mazda

Hyundai

Dodge

Kia

Ram

GMC

Jeep

Nissan

Subaru

Honda

Toyota

Chevrolet

Ford

2.0

2.5

2.1

3.4

3.3

3.8

2.9

3.6

2.7

4.8

3.9

8.5

11.9

15.5

18.6

1.9

2.0

2.1

3.0

3.3

3.4

3.5

3.7

4.3

4.8

4.8

8.6

11.5

14.9

17.7

Market Share

YTD '14 thru Nov*

YTD '13 thru Nov

Minnesota Auto Outlook Data thru November 2014

This report is sponsored by the Minnesota Automobile Dealers Association and produced by Auto Outlook (800-206-0102).

Auto Outlook, Inc. is not responsible for management decisions based on the con-tent of Minnesota Auto Outlook. Copyright Auto Outlook, November 2014.

Reproduction, including photocopying of this publication in whole or in part, is prohibited without the express permission of Auto Outlook, Inc. Any material quoted must be attributed to Minnesota Auto Outlook, pub-lished by Auto Outlook, Inc. on behalf of the Minnesota Automobile Deal-ers Association and must also include the statement: “Data Source: Polk.”

State Market Share for Top 15 Selling Brands YTD ‘14 thru November* vs. YTD ‘13

Top ten ranked brands in each percent change category are shaded green.

*Figures for November 2014 were estimated by Auto Outlook.

Source: Polk

*Figures for November 2014 were estimated by Auto Outlook.

Source: Polk.

December 2014 / Page 11

Member News The American Truck Dealers (ATD), Heavy Duty Trucking magazine and Procede Software announced the nominees for the 2015 Truck Dealer of the year. Out of the six nominees, MADA is proud to announce that two of our members are in the running: Robert A. Neitzke President of GATR Truck Center Sauk Rapids, and Kari J. Rihm, President and CEO of Rihm Kenworth in St. Paul. Congratulations to Robert and Kari!

Christian Brothers Ford, Inc. in Crookston suffered severe damage from a fire in November. Thanks to the incredible support of the community and the staff at the dealership, the business was operating again within the week albeit, with modifications. The business and sales staff have made a new home in empty space across from the dealership. The service department is able to work out of the original space at 1375 Highway 2 East. Todd Christian hopes to have a new dealership built in 2015.

Our condolences to the family of Jerry Bennett, who passed away. Jerry was a long time member of MADA, and served many years on the MADA Insurance Board. He was the former owner of Slayton Auto, Inc. in Slayton. As of late, Jerry worked with his son, Steve Bennett, at Lexus of Wayzata.

Andrew Dahl will lead the entire Dahl Automotive organization effective Jan. 1. Harry Dahl, who has been president for 40 years, will pass the baton to the fifth generation and become Chairman of the Board.

Endorsed Service & Vendors

MADA Services sells a wide variety of products directly to the dealers including business forms, clothing and promotional items. For a full review of options, contact your sales representative at 651-291-2400 or go to www.mada.org

Computerized Vehicle Registration CVR

F&I Products Protective

Dealership Marketing Visible Customer

Group Health Insurance Blue Cross Blue Shield of MN Delta Dental ReliaStar Life

Workers Compensation Ensure Agency

Dealer Bond Program Ensure Agency

Collections Springer Collections

Check Guarantee/Credit Card Processing FIS / Certegy

Disability Income Insurance & Section 125 Cafeteria Plans American Fidelity Assurance

OSHA, EPA & DOT Compliance/Training ComplyNet Corporation

Fleet Fueling Program SuperAmerica

Office Supplies S&TOfficeProducts

Uniforms and Linen Services AmeriPride Linen & Apparel Services

Hole-In-One Insurance Hole-In-One-USA

Pre-Paid Legal, Jim Gavin Identity Theft Shield & Pre-Paid Legal Services

Scott Lambert, Executive Vice President • 200 Lothenbach Ave. • West St. Paul, MN 55118 • (651) 291-2400 • 1-800-652-9029 • FAX (651) 291-2894

200 Lothenbach AvenueWest St. Paul, MN 55118

ADVOCACY • EXPERTISE • EDUCATION • COMMUNICATIONMADA NEWS • DECEMBER 2014

FAQ

Q: I saw an article in the Minneapolis paper last month about the Minnesota Department of Human Rights investigating “Ban the Box” complaints. What is “Ban the Box” and what should we be doing?

A: Ban the Box is a slogan for a law effective Jan. 1, 2014 which requires private employers in Minnesota to wait until a job applicant has been selected for an interview or extended a conditional offer of employment before asking about their criminal record or conducting a criminal background check.The law gets its name from the question on job applications that asks applicants to check a box to indicate whether they have ever been convicted of a crime. It’s now illegal for this question to appear on an employment application.Dealers should check to make sure their job applications no longer ask about criminal history. MADA Services eliminated the “box” and it hasn’t appeared on employment applications purchased from us since August 2013.