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eNewsletter
December 18, 2009 Edition Fourteen |
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Related Automotive Industry News |
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RED FLAGS RULE
ENFORCEMENT
Delayed until
June 1st 2010
For more information on Red Flag Rules & Information visit
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Training and Onsite Meetings Available
Looking for ways to help reduce costs? AADA offers a variety of services that can help.
eTitle Fee Calc Training
We can show you how to reduce or eliminate the underpayment or overpayment of MVD license fees that are collected at the time of purchase.
TRP Training
See how to correctly apply credit plates and avoid the charge back of a deal.
Policy & Procedure Review
Need someone to assist you with how recent MVD Policy & Procedures can change your day to day business transactions.
Frequently Asked Questions
Need experienced help with those frequently asked questions.
Whatever the reason we can help.
Contact our eDealer Services Department for more information.
(602)-468-0888 x 205
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From your
Arizona Automobile Dealers Association | ______________________________
In observance of the Holidays
December 24th at 12:00 pm
and
closed on December 25th
&
December 31st at 12:00 pm
and
closed on January 1st
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| Dear Dealer, |
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We invite you to read more on the "EPA Reconfirming SPCC Qualified Facility Rule" and "Trends in Trade Appraisals: Then and Now".
We also encourage you to see what new MVD changes were made to the requirement of a "Vehicle Verification Inspection" also known as a Level I Inspection and how this change can benefit dealers.
Don't forget to check out our "Did You Know" column for new tips related to a dealer license. |
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EPA Reconfirms SPCC Qualified Facility Rule |
Compliance Date Remains Nov. 10, 2010
The U.S. Environmental Protection Agency (EPA) issued a final Spill Prevention, Control and Countermeasure (SPCC) rule on Nov. 13, keeping intact a 2008 amendment designed to provide regulatory relief for small facilities, including dealerships. EPA has confirmed that "Tier 1" qualified facilities may use a simple, self-certified SPCC plan template in lieu of a complex written plan.
Tier 1 qualified facilities are those that:
(1) Have 10,000 or fewer gallons in aggregate above ground oil storage capacity and a maximum individual oil storage container capacity of 5,000 gallons, and
(2) For the three years preceding SPCC plan certification, have no single discharge of oil to navigable waters exceeding 1,000 gallons, or two discharges of oil to navigable waters each exceeding 42 gallons within any 12-month period.
In 2006, EPA designated most facilities storing fewer than 10,000 gallons of oil and related fluids to be "qualified facilities" eligible to prepare and self-certify their own written facility SPCC plan, thereby avoiding the expense of hiring a professional engineer to do so. The new option for Tier 1 facilities is even less burdensome.
NADA Regulatory Affairs intends to publish further guidance on this issue in early 2010. Click here for a copy of the self-certification SPCC plan template.
-Source: Forrest McConnell, Chairman
NADA Regulatory Affairs Committee
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Trends in Trade Appraisal: Then and Now |
In the past, the prevailing wisdom was to acquire the trade-in vehicle for the least possible amount of money in order to facilitate the sale of the new vehicle and to maximize the profit opportunity of the trade-in vehicle. This mentality frequently created tension between the new- and used-car departments. Conservative used-car managers undervalued trade-ins such that sales were missed while aggressive new-car managers overvalued vehicles causing negative equity to build up in the used-vehicle inventory. Both of these tendencies created discord within the dealership as well as inconsistent and inefficient operating results.
The common notion of a "proper valuation" was generally defined as the vehicle's actual cash value (ACV). In other words, it was the objective of the dealership to acquire a vehicle for an amount equivalent to that which it could be disposed of in the wholesale market. This approach can be referred to as the wholesale valuation method.
Dealers historically relied on numerous third-party publications as well as their own past experience for determining this wholesale value. Auction results were also used as a reference point for the wholesale valuation method.
In some parts of the United States, particularly the West Coast, dealers often determined trade-in values working backwards from amounts that banks would likely finance. In the past decade of credit-driven markets, this loan value approach rivaled the wholesale method for valuing a vehicle. It is safe to say that most dealerships today rely on the wholesale method and/or the retail loan methods when valuing a trade-in vehicle.
Emerging Trend
Today, the used-car market is both efficient and transparent. This means that dealers and consumers have relatively equal access to information concerning vehicle values and selection alternatives. In this environment, a vehicle's proper trade-in value is also affected by how much it can be sold for in the retail market. In other words, if a vehicle's likely retail price is $15,000 and the dealership wishes to make $2,000 profit and plans to spend $800 on reconditioning, then the vehicle's value to the dealer is approximately $12,200. Because the wholesale and retail markets do not move in perfect alignment, there are inevitable instances where a vehicle's value will differ substantially according to the valuation method used-wholesale, loan, or retail.
For example, consider a case where a vehicle's wholesale value based on third-party guidebooks and auction results is $14,500, but its value using the retail method described above is $13,800. In such cases, a dealership using the wholesale valuation method alone may acquire a vehicle for an amount that is too much for the retail market to bear after adding profit and reconditioning costs. This is why the best practice for determining a vehicle's value must take into consideration the wholesale, loan, and retail data points. If the trade vehicle in question is earmarked for the wholesale market, then the loan and retail valuation methods are not relevant.
-Source: A Dealer Guide to the Trade Appraisal Process
in a Transparent Market (SL40)
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Vehicle Verification Inspections |
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Recently Dealers have called us wanting to know about changes that were made to the requirements of a Vehicle Verification Inspection; also known as a Level I Inspection.
On November 10, 2009 the Arizona Motor Vehicle Division released an Office Memo T5533 to all Dealers indicating that effective November 16, 2009, the Division will no longer require a Level I Vehicle Verification Inspection to be performed on vehicles coming in from another state that have proof of title and/or registration from the other state or on vehicles with a Government Certificate of Release of Motor Vehicle (Form 97).
A Level I Inspection will still be needed for the out of state vehicles without proof of title and/or registration or when the documentation appears to be questionable. A Level I Vehicle Verification Inspection can be performed at any MVD office or by the Authorized Third Party Inspector of a dealership for vehicles in which the dealer has sold or taken in on trade.
Please read MVD's complete Vehicle Verification Inspection Policy 13.1.2 to insure you have all of the current information.
For a list of MVD office and hours click here.
For a list of offices now closed on Saturdays click here.
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Employee Benefit Group Captive Program |
An innovative health insurance captive program
An AADA supported employer health plan for Arizona Auto Dealers seeking long term solutions and cost control of employee health care programs.
Features of the plan include, plan design flexibility, ease of administration and lower fixed costs.
The AADA Dealer employer health plan eliminates significant rate increases every year and improves cash flow.
Dealers having an interest in hearing how their employee health care plans can be improved while lowering their cost, should contact Paul Wisowaty at AADA, (602) 468-0888 x 116 to schedule a very informative meeting.
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DID YOU KNOW |
Dealer Plate Use:
A Dealer Plate can NOT be used on service loaners you must title and register those vehicles in the dealerships name.
Temporary Shut Down of a Dealer:
You cannot temporarily shut down your dealership, this is a violation of your license (28-4493.5) Arizona Motor Vehicle Division Dealer License Unit does not have an Seasonal License, especially for RV Dealers. If you plan on closing your doors temporarily, you can for 90 Days only, you must submit a letter on your letterhead explaining that you will close from this Date___ to this Date____ (no more than 90 Days) sign and date the letter plus you must submit your Original Dealer License and your Dealer Plates. Mail your packet to MVD Dealer License Unit PO Box 2100 Mail Drop 552M Phoenix, AZ 85001-2100.
On the 91st day if MVD Dealer License Unit has not heard from the dealer you will have to apply for a new license.
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Thank you for your continued support.
AADA
Arizona Automobile Dealers Association |
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Did you know? AADA offers a variety of payment options such as:
- ACH
- Checks
- Credit Cards
For more information, please contact our Accounting department at (602) 468-0888 x 227 | | |
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