By Peter Welch, NADA President and CEO

There is no doubt that the way we market new vehicles has changed radically during the past few years. OEMs and franchised new-car dealers have more ways to spend their marketing budgets than ever before, and pinpoint e-commerce tools and digital targeting have enhanced these marketing advances. But one star continues to shine: auto shows.

In 2005, the average customer visited a dealership 6.1 times prior to purchasing a new vehicle. Today that number has dropped to 2.4 visits. So where do consumers go to actually touch and feel new vehicle product? Given their physical presence, auto shows are a unique, experiential channel where consumers, armed with information gathered online, can evaluate vehicles first-hand across all segments and brands.

And while auto shows measurably ignite consumer excitement for a brand, perhaps their greatest impact is on vehicle purchase consideration and brand loyalty—the two metrics that just so happen to matter more than any other in today’s ultra-competitive market. Auto shows do this by concurrently introducing new potential customers into a brand’s pipeline while reaffirming the brand’s unique value proposition for current customers in a meaningful way.

For example, we know that many millennials delayed their first new- vehicle purchase until later in life than previous generations. As a result, their introduction to OEM brands was delayed. But millennials today are buying new cars at a higher rate than they did a decade ago. According to a recent Strategic Vision report, the percentage of new-vehicle sales to consumers under the age of 35 was 19.3 percent. In 2007, it was 16.6 percent. And guess who’s coming to many auto shows at a higher rate than any other demographic? That’s right; millennials.

And they buy. Dr. Richard Waterman, a professor at the University of Pennsylvania’s Wharton School who has been examining auto show impact on consumers for 20 years, finds that auto show attendees are consistently twice as likely to make a new- vehicle purchase in the year following their show visit than the general population.

According to Foresight Research, auto show attendees cited show attendance as more influential on their purchase decision than digital advertising, direct marketing or event sponsorship. What’s more, among new-vehicle buyers who attended an auto show prior to making a purchase, 56 percent indicated their purchase was influenced by the show they attended, with 21 percent of buyers attending an auto show purchasing a brand they were not already considering before the show. And of those who reported they would be in the market to buy a new vehicle within a year of attending one recent auto show, 90 percent said their auto show visit had influenced what vehicle they would ultimately purchase.

The numbers simply don’t lie. When it comes to generating meaningful consumer experiences that enhance purchase consideration and brand loyalty—and that lead to sales—local-focused content and events are king. Local and regional auto show organizers and involved dealer groups know what will move the needle, and an OEM has the opportunity to communicate with current and potential consumers in their own backyards, often with local brand representatives who speak to consumers in terms with which they are comfortable and who will heighten their relationship with the brand.

Unfortunately, a number of OEMs have recently decided to pull back their investments in auto shows— often in favor of new digital tools. And while digital’s potential for marketing is growing, the gritty reality is that many consumers require an in-person experience with a product before purchase.

Luckily, OEMs don’t have to reinvent the wheel. America’s auto shows are a proven investment that pays high dividends, not just in raw sales but in brand excitement and customer experience—particularly when consumers are questioning whether the time is right to buy a new vehicle at all. This is why smart automakers don’t see auto shows as a relic of the past, but rather as a launchpad for their digital marketing prowess.

It is true that show costs have unfortunately escalated in recent years—as convention centers have raised rates, displays have become more sophisticated, and the cost of logistics continue to rise. But that’s no justification for throwing the baby out with the bathwater. And the brand gurus know this. There’s a big difference between expenses and investments. We hope the OEMs come back around to what dealers know and what the numbers show: Auto shows drive sales and brand loyalty.

Let’s find a way to harness that reality and make auto shows work better for us. The numbers clearly tell us that showing the metal is still the best way to move the metal.

By Shelley B. Fowler*

It makes sense to conclude that the party whose name is on a car’s certificate of title is the car’s owner. That’s not always so. In a recent case, a court was asked to decide whether a dealership with title to a car was the car’s owner at the time the car was involved in an accident that killed two people. Let’s see what the court concluded.

Jonathan Elmore was involved in a car accident that killed him and his passenger, Craig Armstrong. Craig’s father, Charles, as administrator of Craig’s estate, sued several parties, including Martin Cadillac, Inc., and Martin Cadillac’s insurer, The Travelers Indemnity Company, for the wrongful death of his son.

Martin Cadillac had received the car in trade and gave it to ABC Bowling Green, LLC, to sell at auction. DeWalt Auto Sales bought the car at auction but did not receive the Kentucky title. Martin Cadillac completed the required Notice to Clerk of Acquisition, which requested that the county clerk record the title assignment to the dealership, 26 days after taking the car in trade. The notice, however, was required to be filed within 15 days of the assignment of the car to the dealership. After Elmore bought the car from DeWalt Auto, Martin Cadillac delivered paperwork transferring title to the car to ABC. At the time of the accident, however, the title was still in Martin Cadillac’s name.

Kentucky is a certificate of title state for purposes of determining ownership of a vehicle. However, an exception applies for a licensed motor vehicle dealer who transfers physical possession of a vehicle to a buyer pursuant to a bona fide sale, so long as certain requirements are met. One of those requirements mandates that a dealer who assigns a vehicle to a “purchaser for use” require proof of insurance before delivering possession of the vehicle.

The trial court found that this requirement did not apply to Martin Cadillac because DeWalt Auto was not a “purchaser for use,” and, therefore, Martin Cadillac’s failure to satisfy this requirement did not prevent it from satisfying the ownership exception. The trial court concluded that Martin Cadillac was not the owner of the car.

The appellate court reversed, finding that the duty to obtain proof of insurance before delivering possession of a vehicle applies even in a dealer-to-dealer sale. The appellate court reversed the grant of summary judgment in favor of Martin Cadillac and Travelers Indemnity and remanded for the trial court to determine whether Martin Cadillac properly complied with its statutory requirements.

The Supreme Court of Kentucky reversed and reinstated the trial court’s order granting summary judgment for Martin Cadillac and Travelers Indemnity. The high court found that the “purchaser for use” language applies to a sale to a consumer rather than a sale to a dealership for resale. The high court added that Martin Cadillac’s untimely filing of the notice requesting a title assignment was not fatal because Martin Cadillac substantially complied with the requirement by complying at a later date. Because, as of the date of the accident, Martin Cadillac had sent the notice of assignment to the county clerk and transferred the necessary paperwork to ABC, Martin Cadillac was not the owner of the car, even though the title was still in Martin Cadillac’s name, and Martin Cadillac and Travelers Indemnity were not responsible for coverage of the car.

Remember that this case was based on the intricacies of Kentucky law. To limit your exposure in a case like this, make sure you are knowledgeable about the titling laws in your state and comply with them when transferring title to a vehicle.

Travelers Indemnity Company v. Armstrong, 2018 Ky. LEXIS 449 (Ky. November 1, 2018).

*Shelley B. Fowler is a managing editor at CounselorLibrary.com, LLC. She can be reached at 410.865.5406 or by email at rfowler@hudco.com.

-George Nenni, Generations Digital

Many dealers may have seen the recent Automotive News article on Facebook’s new “Automotive Playbook for Dealers.”  We have reviewed this playbook, and have come away very impressed with the way Facebook outlines the broad advertising categories that work well on their platform.  Whether it be “why buy” campaigns, specific product catalog ads, or promoting events, Facebook can be a very cost-effective tool for a dealership’s digital marketing efforts.  It has been said that Facebook ads are priced where Google paid search was priced 15 years ago.  For a dealership that is running well-designed and well-targeted ads, they should expect to see costs per click under $1 (or even under 50 cents) and a costs per hard-conversion of as low as $25.

The challenge that typically exists, and that Facebook’s new playbook does not properly address, is linking Facebook stats with Google Analytics stats to more accurately measure the quality of these paid campaigns.  The Facebook playbook simply says to use pixel tracking to track website conversions, but that is such a small amount of data to measure. What I mean is that we know 90% of website shoppers will not submit a hard conversion (lead, chat, text, click to call, etc.).  Therefore, if we only measure conversions, we will fail to identify campaigns that didn’t generate leads but did generate strong shopping traffic.  In addition, tracking conversions using Facebook’s pixel leaves off chat, text, trade-in tools, and other conversion methods not supported through FB’s pixel.

The best approach, we feel, is to combine Facebook campaign metrics with the downstream traffic metrics in Google Analytics. We use a simple Google spreadsheet that can accomplish this.  First, the dealership must make sure they are UTM-tagging all of the URLs used in the Facebook campaigns. This tagging should include the campaign name and make sure it is the same campaign name that was used in Facebook. This allows you to easily match the Facebook campaign stats with the performance stats in Google Analytics.  Then, by looking at the amount you are spending on each campaign, you can calculate important metrics such as: cost per shopper, cost per email lead, cost per trade in tool inquiry, as well as traffic quality and engagement metrics.

If you are an automotive retailer, let us help you find and eliminate the wasted spending in your digital marketing investments.  We can help you greatly improve your return on ad spend and gain more transparency with your digital marketing investments.  Details here: generationsdigital.com

You can also follow us on these social networks:

Linkedin: linkedin.com/in/georgenenni

Facebook: facebook.com/generationsdigital/

Twitter: twitter.com/generationsdig

For all employers, dealerships included, complying with the Americans with Disabilities Act (ADA) can seemingly be one of the most challenging tasks for management and human resources. Not only does it seem like there is a long list of complex rules and standards to keep in mind, the penalties for screwing up can be daunting: a discrimination claim, a government investigation, or an attorney demand letter seeking hundreds of thousands of dollars can land on your lap if you don’t handle things the right way.

But we have good news for you. In reality, compliance with the ADA doesn’t have to be a daunting prospect. In fact, sometimes it’s as easy as asking the very same thing you might ask a potential customer when they first walk on your lot: “How can we help you?” A recent federal court case against an auto dealership in Arkansas helps shine a light on what you should do – and what you shouldn’t do – in order to stay on the right side of the law. Here are three things you need to know about the latest ADA court ruling.

1.  You Need To Consider Timing When It Comes To TerminationsJudith Vaughan began working for an Arkansas-based dealership as an Accounts Payable Clerk in late 2016. Several months later, a series of problems unfolded over the course of about a week that led to her termination and a federal employment discrimination lawsuit.The trouble began on Monday, January 30, 2017, when Vaughan began experiencing chest pains and went to the emergency room, fearing she was having a heart attack. After several days of medical treatment, she learned that her symptoms were the result of a panic attack. She told her supervisor that she was diagnosed with anxiety, depression, and had suffered a panic attack earlier in the week. She tried to return to work that Friday but started to have another panic attack; she emailed her supervisor to explain that she “can’t do this” and was “still hurting too bad,” and left work. She once again returned to work on Tuesday, February 7, but the dealership terminated her employment for violating the company’s attendance and call-in policies. Before we get to the nitty-gritty of ADA compliance, it’s important to use this case as a reminder of the risks involved in terminating an employee shortly after you learn that they are in some sort of protected class. If you just learn that an employee is pregnant, or sustained an on-the-job injury, or just made a report of sexual harassment, or complained about safety conditions in the workplace, or – as in this case – diagnosed with a medical condition, you might need to alter your plans when it comes to employee discipline. It’s easy for an investigator, a court, or a jury to infer a bad motive on your part if you take action against a worker right after something like this occurs.You won’t necessarily have to keep them employed forever, however. If circumstances existed that led you to want to terminate their employment but the worker ends up joining a protected category right before you were about to pull the trigger, you will just need to tread carefully. We recommend you contact your labor and employment counsel, because each situation is a little different and you’ll need tailored advice for each case.
2.  Documentation Can Be A Lifesaver Getting back to the case at hand, Vaughan went to the Equal Employment Opportunity Commission (EEOC) to complain about her termination, and the agency filed an ADA lawsuit on her behalf against the dealership. The employer asked the court to dismiss the case, but in a ruling that was just handed down by U.S. District Judge J. Leon Holmes on April 11, the court ruled in Vaughan’s favor and cleared the case to go to trial.  There are two ways in which better documentation might have saved the day for the employer in this case and led the court to rule in its favor. First, imagine if the employer had kept contemporaneous notes or other documentation about Vaughan’s job performance throughout her employment. Imagine, even, that the employer had kept internal notes and perhaps even provided the employee with written warnings indicating that her employment was at risk because of poor performance. It’s a lot easier to justify a termination if you can show written proof that you were on the path towards disciplining the employee well before they put themselves in a protected category.Second, in Vaughan’s case, she claims that her supervisor told her at her termination meeting that she was being let go “due to her health,” because it “wasn’t going to work out.” The supervisor denies having actually said that, but as you probably know, it’s hard to win a credibility contest in court with a sympathetic worker on the other side when you don’t have good documentation. But the court record doesn’t seem to indicate that the dealership provided Vaughan with a termination letter outlining the reasons for the firing. And this is the second way better documentation could have saved the dealership.We always recommend drafting up a concise and to-the-point termination letter that you hand your worker at the time you are letting them go. The letter serves two critical functions. First, it gives you a set of talking points to refer to as you are communicating the dismissal to the worker. By sticking to this precise set of points, you make sure you don’t stick your foot in your mouth and unintentionally say something that could come back to bite you.Second, by writing such a letter, you establish the narrative regarding the reason for termination that you can consistently refer to as an explanation for the termination. Because courts sometimes fault you for providing inconsistent reasons for a termination at various stages in the process, you can create a truthful and powerful explanation at the outset and in writing, and continually refer to it during the termination meeting, during an unemployment hearing, at an agency investigative meeting, and in court. In this case, had the dealership’s supervisor written such a letter, it would have been harder for Vaughan to create a narrative about what was said to her at the termination meeting.
3.  “How Can We Help You?” Can Be Your Saving Grace
   Getting to the crux of this case, the easiest thing that this dealership could have done to avoid ADA exposure with Vaughan is to begin an “interactive process” with her in order to (a) determine whether she has an ADA-qualifying disability, and (b) if so, figure out whether any reasonable accommodations exist that would have allowed her to do her job. Although the dealership argued to the court that Vaughan never requested an accommodation and therefore never triggered the interactive process, the court disagreed.The court noted that all an employee needs to do is to make it clear that they need assistance for their disability. They simply need to provide the employer with enough information that, under the circumstances, would allow the employer to fairly know that the worker has a possible disability and a desire for an accommodation. The judge said that the employee is not required to use “magic words” such as “reasonable accommodation” to kick-start the process.So once you have enough information that you believe triggers an interactive process (“My back hurts and it’s hard for me to work today,” or “My new medication makes me drowsy and I am having trouble getting to work on time”), all you need to do is say “How can we help you?” That, in essence, is the beginning of the interactive process. It is also good management, as you should always be working with your employees to find out what kinds of resources you can be providing them to help them do their job better. You have many options at this point, depending on the worker’s answer. You have the right to seek medical information to confirm any diagnosis and get ideas for possible accommodations. You might directly work with the employee to adjust their duties, if reasonable. You can confer with the worker’s direct supervisor to find out how certain proposed accommodations would impact the day-to-day workings of the department. You could experiment with certain possible adjustments to see how they work out. There are so many options, in fact, it’s hard to list them all. Instead, the best option at this point is to consult with your labor and employment counsel to make sure you are positioning the worker correctly and complying with the ADA. The solution might be so simple that it costs little to no money and barely makes a ripple in the functioning of your dealership; but your worker is happy that you worked with them to solve their problem and you avoided ADA liability.

Conclusion

The ADA was amended about a decade ago, and it is now surprisingly easy for a worker to prove that they are “disabled” under the federal statute. For this reason, it is usually best to err on the side of caution and consider possible reasonable accommodations before a legal conflict develops. By remembering this case, and remembering the critical words – “How can we help you?” – you will be well on your way to ADA compliance the next time a situation like this presents itself.

For more information, contact the authors at TCoffey@fisherphillips.com (404.240.4222) or MSimpson@fisherphillips.com (404.240.4221).

Additional 2018 and 2017 Data Due September 30, 2019

Dealers with 100 or more employees are subject to the U.S. Equal Employment Opportunity Commission’s (EEOC) EEO-1 Survey filing mandate. The EEOC enforces federal laws that make it illegal to discriminate against a job applicant or employee because of race, color, religion, sex, national origin, age, disability or genetic information. The EEO-1 Survey for 2018 data is due by May 31, 2019, and must include demographic data on race, gender and ethnicity by job category (information known as “EEO-1 Survey Component 1 data”).

In addition, the Federal District Court for the District of Columbia recently ruled that additional data for calendar years 2018 and 2017 must be filed by September 30, 2019. Known as “EEO-1 Survey Component 2 data,” these additional filings must include employee W-2 wage and hours worked information set out in 12 specified pay bands. Important: the EEOC intends to open by mid-July a portal for Component 2 data; NADA will notify dealers when that happens.

Last week, the U.S. Department of Justice filed a notice to appeal the District Court’s ruling requiring the Component 2 data. However, since the District Court’s ruling has yet to be stayed, NADA suggests that for now EEO-1 filers should assume that they will have to file Component 2 data by the September 30, 2019 deadline.

Questions can be directed to regulatoryaffairs@nada.org.

Mike Alford
Chairman, Regulatory Affairs Committee

By Catherine C. Worthington and Anastasia V. Caton*

Repossessing vehicles from consumers is an activity fraught with legal risk. A Debtor who faces the loss of a vehicle can be furious and unpredictable, and repossession companies, unless carefully vetted, can be, shall we say, less than entirely punctilious when it comes to observing the pesky legal requirements that apply to these situations.

It sometimes seems that topics run in bunches for us. So it is with repossession cases this month. Let’s explore a couple of them to see what we can learn.

Patrick and Jennifer O’Connell sued Pursuit, LLC, and Primeritus Financial Services, Ind., for violating the Fair Debt Collection Practices Act and the Kentucky Consumer Protection Act and for negligence per se and conversion in connection with Pursuit’s repossession of their vehicle. The O’Connells moved for summary judgement on the FDCPA and negligence claims, and the defendants moved for summary judgement on the KCPA and conversion claims.

Because a violation of state laws triggers liability for an illegal repossession under both the FDCPA and Kentucky’s negligence per se statute, the federal trial court first considered whether the defendants violated Kentucky Revised Statutes 355.9-6.9, the state’s repossession stature under Article 9 of the Uniform Commercial Code.

The court found that the defendants elected to repossess the vehicle without judicial process. A repossessor may not breach the peace when it proceeds without judicial process.

One way a secured part can breach the peace is by enlisting the assistance of law enforcement without judicial approval. When Pursuit repossessed the O’Connells’ vehicle, a police officer was present, and he directly involved himself in the repossession by interacting with Patrick and the Pursuit employees.

The court noted that “[w]hether law enforcement confirmed Pursuit’s rights to repossess the truck is inconsequential. Nor does the court need to answer the question of whether law enforcement’s participation was the but-for cause of [Patrick] surrendering his truck. Instead, the court only asks if law enforcement’s connection gives any impression that the state is involved in the repossession.”

In this case, the court found that the state was involved. Therefore, the court concluded that the vehicle repossession violated Kentucky law by breaching the peace. Accordingly, the court granted summary judgement for the O’Connells on the FDCPA and negligence per se claims.

However, the court grant summary judgement for the defendants on the KCPA and conversion claims. The court rejected the KCPA claim because it requires “privity of contract” between the consumer and the provider of goods or services (“privity of contract” is a fancy legal term that means a contractual relationship). The court found that the O’Connells were not in a privity with Pursuit or Primeritus because they did not buy goods from them and did not enter into a contract with them. The vehicle financing was provided by SunTrust.

With respect to the conversion claim, the court concluded that the O’Connells did not support every element of the tort of conversion, specifically the element requiring that the defendants use the property for their own beneficial enjoyment. The court noted that collecting compensation for repossessing a vehicle does not satisfy this requirement.

Finally, the court granted the defendants’ motion to dismiss the O’Connells’ request for emotional and punitive damages.

In another case, this one from Ohio, George and Maria Oliver financed the purchase of their car through their credit union, but ARS Ohio LLC, a repossession company, acting on behalf of Westlake Services LLC, a sales finance company, repossessed the car.

Westlake had no business relationship with the Olivers. Instead, it mistakenly repossessed their car because the previous owner had defaulted on a credit agreement with Westlake. The Olivers eventually got their car back from ARS, with damage from improper towing.

The Olivers sued Westlake and ARS, claiming, among other things, that the two violated the Fair Debt Collection Practices Act and Ohio’s Consumer Sales Practices Act and that they committed a civil theft. Westlake moved to dismiss, and ARS moved for judgement on the pleadings.

The federal trial court denied the defendants’ motions on the Olivers’ FDCPA claims but granted their motions of the OCSPA and civil theft claims. ARS claimed that the Olivers could not bring a claim under the FSCPA because they were not “consumers,” a term that invludes only the person who owes or allegedly owes a debt. Westlake claimed that it was not a “debt collector” under the FDCPA.

The court first found that a plaintiff can still bring a claim for unfairness under Section 1692f of the FDCPA even if the plaintiff does not actually owe the debt. The court looked to the purpose of the FDCPA, which is to protect debtors and third parties from unconscionable debt collection practices. As a result the court found that the Olivers could bring their claim even though they were not in a credit relationship with Westlake or ARS.

Next, the court considered whether ARS and Westlake were debt collectors under the FDCPA. The court found that Westlake was not a debt collector because it was a creditor and that ARS was not a debt collector because its primary business was enforcing security interests. However, the court explained that a person who is not otherwise a debt collector is nonetheless subject to one provision of the FDCPA–Section 1692f(6), the provision under which the Olivers brought their claim. Section 1692f(6) makes it an unfair practice to repossess property when there is no present right to possession of the property. Because the Ovlers pleaded facts sufficient to show that ARS and Westlake violated Section 1692f(6), the court denied the defendants’ motions on the Olivers’ FDCPA claim.

The court next considered the Olivers’ OCSPA claim. A plaintiff can bring a claim against a defendant under the OCSPA only if the parties have a business relationship. Because the Olivers did not have a business relationship with either Westlake or ARS, the court dismissed their OCSPA claim.

Finally, the court considered the Olivers’ civil theft claim. In Ohio, civil theft occurs only when the defendant causes the plaintiff to execute a writing that disposes of or encumbers property or by which a monetary obligation is incurred. Because the Olivers presented no evidence that either Westlake or ARS had them execute any documents, and because they eventually got their car back, the court found that the Olivers failed to state a claim for civil theft. Accordingly, the court dismissed their civil theft claim.

Finance companies, banks, and credit unions care about the intricacies of repossession, but should dealers care? Certainly, buy-here, pay-here dealers should and, believe it or not, there are even occasions when a dealership might find itself in a position to exercise the right of repossession. These cases, and others like them, illustrate the potential pitfalls all these folks face when they elect to put a consumer’s car “on the hook.”

O’Connell v. Pursuit, LLC, 2019 U.S. Dist. LEXIS 17951 (E.D. Ky. February 5, 2019).

Olicer v. ARS Ohio LLC, 2019 U.S. Dist. LEXIS 13201 (N.D. Ohio January 28, 2019).

*Catherine C. Worthington is a managing editor at CounselorLibrary.com, LLC. She can be reached at 410.782.2349 or by email at cworthington@hudco.com. Anastasia V. Caton is a partner in the Washinton, D.C., officer of Hudson Cook, LLP. She can be reached at 202.715.2001 or by email at acaton@hudco.com.