ISSUE 4 | WINTER 2021 WE ARE A STRONG COLLECT I VE VO I CE , DED I CATED TO ADVANC I NG THE AUTOMOT I VE I NDUSTRY I N WEST V I RG I N I A . inside: 24 BY THE NUMBERS: 2021 YEAR END CONSIDERATIONS 12 TIME DEALER OF THE YEAR: GINNY BOWDEN News "WVADA works closely with us to accomplish our needs and wants, and they help us solve our issues." -Ginny Bowden
Driving excellence in all we do. 304-624-5564 www.tetrickbartlett.com T &B Tetrick & Bartlett, PLLC is an accounting and consulting firm serving clients throughout West Virginia. We are dedicated to providing our automobile dealer clients with professional, personalized services and guidance in a wide range of financial and business needs.
WE HAVE West Virginia COVERED! In Business in West Virginia For Your Business for 30 years Responsible Attorney, Johnnie E. Brown www.pffwv.com Beckley 304-254-9300 | Charleston 304-344-0100 | Martinsburg 304-260-1200 | Morgantown 304-225-2200 WHEN IT COMES TO BEING LEGALLY COMPLIANT AND AGGRESSIVELY DEFENDED, YOU HAVE A CHOICE. WHY NOT CHOOSE A LAW FIRM THAT KNOWS YOUR INDUSTRY AND IS FOUNDED IN WEST VIRGINIA WITH FOUR OFFICES COVERING EACH REGION OF THE STATE TO PROTECT YOU? OUR FOUNDING MEMBERS AND ATTORNEYS LIVE IN THE COMMUNITIES WE SERVE. PULLIN, FOWLER, FLANAGAN, BROWN & POE, PLLC KNOWS WEST VIRGINIA AND WEST VIRGINIA’S AUTOMOBILE DEALERS.
CONTENTS WVCAR.COM Features 6 President's Message 7 Save the Date 8 Thank You to all our WVCar PAC Contributors for the 2022 Primary Elections! 12 Getting to Know Time Dealer of the Year Ginny Bowden 18 2021 E-Titling Seminars 20 Counselor’s Corner: New Safeguards Rule 24 By The Numbers: 2021 Year End Considerations 28 In the Community ©2022West Virginia Automobile Dealers Association (WVADA) | The newsLINK Group, LLC. All rights reserved. TheWVADANews is published four times each year by The newsLINK Group, LLC for the WVADA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the WVADA, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. The WVADA News is a collective work, and as such, some articles are submitted by authors who are independent of theWVADA.While theWVADANews encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at 855.747.4003. 18 24 12 wvcar.com 4 WVADA
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President’s Message By Jared Wyrick Sometimes it feels like time is standing still. Twelve months ago, it seemed like there was an ongoing national conversation about saying goodbye to 2020 and hello to 2021. This year, it’s the same conversation, except that everybody was as eager to say goodbye to 2021 as they were to say hello. Understandably, people want 2022 to be different: happier, easier, and more unified as a nation. Will we get what we want? Who knows? We’ll have to stick around and see. But despite the difficulties of the last 12 months, 2021 had some good moments, too. For example: • We started the year off by nearly doubling the documentary fee. Now, WV dealers have the ability to be competitive with our surrounding states. • We have strengthened our legislative presence and built one of the largest PACs in the state. WVADA strives to keep an open line of communication with state and local officials to keep you informed about what is going on while educating our political leaders about our needs as an industry. • We also keep in touch with NADA and assist with national policymaking. A group of WV dealers met with Senator Manchin this summer and the outcome of the meeting was extremely beneficial. • Some great people retired, including Denny at Timbrook Ford, Vaughn Booth at Superior Toyota Hyundai, and Jack Garrett. We will miss all of you! • The 87th Annual Family Dealer Convention was in June 2021 at The Greenbrier Resort. This convention was the first big event we’d hosted since the beginning of the pandemic shutdown. Judging from the record turnout, our members were ready to get together and enjoy each other’s company in a beautiful setting. The conference events were enjoyable and informative, and the music and food were excellent. It’s easy to take things for granted, but the pandemic has helped everyone appreciate just how good it is to meet in person. • In November, WVADA and the WV DMV had an informative seminar about motor e-titles and registration. West Virginia is slowly transitioning to a more streamlined titling process. It is our goal to have every dealership in the state fully using the new e-titling process by mid-summer this year. Of course, more good has happened than the few brief items I’ve mentioned, but I don’t have space here to talk wvcar.com 6 WVADA
As the new year begins, some things will be the same as last year. We will continue to update you about COVID-19 as changes occur, and we will also see what NADA and the legislature are doing. We have your best interests at heart and will do what we can to help you. A Night in Monte Carlo Save the Date VIP Charity Gala February 10th 6pm-9pm Charleston Coliseum and Convention Center RSVP and purchase tickets at: www.WestVirginiaAutoShow.com/RSVP about everything. Just know that by being a member and participating in association events, you are helping yourself and your dealership. Together, we are making a stronger community. As the new year begins, some things will be the same as last year. We will continue to update you about COVID-19 as changes occur, and we will continue to update you on national and state policy changes. We have your best interests at heart and will do what we can to help you. Although the West Virginia Auto Show was canceled this year because of COVID-19, we are still planning a VIP Charity Gala. This fun and worthwhile event will be held Feb. 10, 2022, at the Charleston Coliseum & Convention Center. Dealers, Associate Members, Subscribers, and our Sponsors should have already received tickets for the event. The convention center has been renovated recently, and its riverside location makes it a spectacular choice. Please make every effort to attend. Serving as the association president is an honor. I appreciate your support, your hard work and your friendship. Let’s keep everything going. t Issue 4 2021 7 WVADA
Thank You to all our WVCar PAC Contributors for the 2022 Primary Elections! Goal Achieved! Thank you to everyone who contributed to our WVCar PAC. With our members supports, we have made a record contribution this year! When we combined our contributions with what we had in the reserves from last year, we have raised $457,000. We have finished our year off strong in 2021 and we will continue building our relationships through 2022. The WVCar PAC contributes to West Virginia candidates who support a pro-business, prodealer mentality. Dealer member personal contributions are the pillar of the WVCar PAC, and your contribution is imperative. Not only is your financial participation a crucial part of having a successful PAC but also having WVADA dealers involved with our elected officials. WVCar gives our members the ability to extend their influence well beyond their own legislative districts. https://wvcar.com/wvcar/ $450,000 $225,000 $1000.00 wvcar.com 8 WVADA
President's Club — $5,000 Kami Astorg Astorg Motor Company Paul Astorg Astorg Motor Company Lee Baierl Lithia Motors David Ball Advantage Toyota Shawn Ball L & S Toyota Brad Blake Dutch Miller Auto Group Ginny Bowden McClinton Chevrolet Andrew Claydon University Motors Andrew Cognac Premier Nissan John Cognac Premier Nissan Chevrolet Buick GMC Bill Cole Cole Automotive Group Charlie Cole Cole Harley Davidson Jason Cole Cole Automotive Group Lee Cole Cole Automotive Group Tom Cole Cole Chevy Ernie & Lori Davis Hyundai of Beckley Martha Fato Straub Auto Group Michael D. Ferns Sr. A & B Kia Sales Joel Goldy Goldy Auto Harry Green Harry Green Chevrolet, Inc. TR Hathaway Superior Toyota Joey Holland Joe Holland Chevrolet John Howerton John Howerton Honda Rick Hughes Capital Automotive John Jenkins Jenkins Ford Todd Judy Todd Judy Ford Amy LeRose Northside Chevrolet Jonathan LeRose Northside Chevrolet Rodney LeRose Midstate Chevrolet Rodney LeRose II Midstate Chevrolet Mike Matheny Matheny Motor Truck Company Chris Miller Dutch Miller Auto Group Matt Miller Dutch Miller Auto Group Sam Miller Dutch Miller Auto Group Jason Minsker Buckhannon Toyota Bob MosesMoses Auto Group Jason Moses Moses Inc Meghan Moses Moses Ford BMW Steve Moses Moses Ford BMW Issue 4 2021 9 WVADA
President's Club — $5,000 Richard Nourse Pioneer Honda VW Roberta Olejasz Bob Robinson Chevrolet/Buick/GMC Fred Parsons Kent Parsons Ford Bruce Pauley Pauley Motor Car Suzanne Persinger Moses Honda Martin Peters Dutch Miller Auto Group Keith Powell Yes Chevrolet/Yes Ford Charlotte Pyle Capital City Auto Auction Lester Raines Lester Raines Honda Robert Ramey Ramey Motors Dennis Sheets Sheets CDJR Jamie & Joanna SpearsAstorg Auto of Charleston Richard Stephens Stephens Auto Center Steve Talbott Greenbrier Chevrolet Buick Martha Thornhill Thornhill Auto Group Wally Thornhill Thornhill Auto Group Fred Timbrook Timbrook Ford Matt Urse Urse Honda Don Warner Warner Kia Paul White Paul White Chevrolet Champion Promoters — $2,000 - $2,800 Nick Green Harry Green 7 Acres Matt Jenkins Jenkins Subaru Hyundai Lou Thomas Subaru Lou Thomas Subaru Nathan Thornhill Thornhill Auto Group Sydney Thornhill-Brown Thornhill Auto Group Gold Promotors — $1,000 - $1,500 Jared Wyrick WVADA Patrons — $500 Chase Barton Stephens Auto Center Guy Chicchirichi Guy's Buick GMC wvcar.com 10 WVADA
Bill Cole Bill Cole Automall Hal Green Harry Green 7 Acres Jonathan LeRose Mid-State Chevrolet Buick Rodney LeRose II Mid-State Chevrolet Buick Chris Miller Dutch Miller Auto Group Matt Miller Dutch Miller Chevrolet Hyundai Bob Moses Moses Cadillac Buick GMC Steve Moses Moses Auto Group Joe Pyle Walker Chrysler Dodge Jeep Ram Chad Remp Legacy Truck Centers Wheeling Dennis Sheets Sheets CDJR Richard Stephens Stephens Auto Center Jack Stewart Country Club Auto Group Wally Thornhill Thornhill Superstore Sydney Thornhill-Brown Thornhill Auto Group Fred Timbrook Timbrook Ford WVADA POLITICAL ACTION COMMITTEE Bill Cole WVCar Chair Bill Cole Auto Mall “I am so proud of the efforts and support from our members this past year.” Other Contributors Chase Barton Stephens Auto Center Joel Goldy Goldy Chrsyler Dodge Jeep Ram John Jenkins Jenkins Ford TR Hathaway Superior Toyota Hyundai Tim Matheny Matheny Motor Company Jason Moses Moses Inc Steve Talbott Greenbrier Motor Company NADA President's Club Thank you to our NADA PAC 2021 Contributors! Issue 4 2021 11 WVADA
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Ginny Bowden Getting to Know Time Dealer of the Year You have a B.A. in business economics from Wofford College in Spartanburg, South Carolina. Why that degree, and why there? When it was time to think about college, I wanted to be outside West Virginia, go south and explore, but the thought of having 200 people in a lecture hall seemed daunting. I knew if I was going to do well in school and have a good experience, I needed to be in a small setting. Wofford College is a small liberal arts school, and it was a good choice academically and socially. I loved it there. I had a great experience, and it was good preparation for many things. I majored in business economics and minored in English because I knew I could apply what I learned to anything I did. Virginia “Ginny” Bowden is a fourth-generation dealer. Her dealership, McClinton Auto Group, is in Parkersburg, West Virginia. It has been in business since 1915 under the direction of her father, J.S. McClinton III; grandfather, J.S. McClinton Jr.; and great-grandfather, J.S. McClinton Sr. That is a big deal by itself, but Ginny has also been nominated as West Virginia’s nominee for the 2022 TIME Dealer of the Year in partnership with Ally. WVADA recently talked with Ginny about her life, work and nomination. Continued on the following page Issue 4 2021 13 WVADA
You met Wyn, your husband and general manager, on a ranch in Wyoming. Please tell us about it. My husband, Wyn, and I met in Encampment, Wyoming, at a working guest ranch, the A Bar A Ranch. It is practically in the middle of nowhere, and the family that owns it has around 150,000 acres. The A Bar A has wonderful guest quarters and numerous activities, including horseback riding, hiking and fly fishing. I was a housekeeper, and I cleaned cabins for two summers. Wyn worked there for three summers. He was a fishing guide and ranch hand the first two summers, and he fixed fences and drainage and did stuff all over the ranch. He was a wrangler the third summer. He took guests on trail rides and helped take care of the horses. After falling in love with the west and in the west, we moved to Jackson Hole for six years. Many couples from the ranch are now married. Some of our best friends are from the ranch and Jackson Hole. We now sell some vehicles to the ranch because we are close to the managers. They tell us what they need, and we transport their vehicles from West Virginia to Wyoming. Even in a digital age, it’s still a relationship business! What led to the decision to become the dealer in 2017? Tell us about your journey and moving back to West Virginia. My father was very good at keeping work and personal separate when I was growing up, so I had very little exposure to the dealership. I knew we owned a family dealership, but that’s it. I didn’t know the inner workings. Dad wanted my brother and me to find our own way and figure out what we wanted to do with our lives without the pressure of being expected to go into the family business. My husband is from Little Rock, Arkansas, so Wyn and I lived in Little Rock for three years after we were married. In 2015, my dad sent a letter to my brother and me. In the letter, he talked about a succession plan, and he suggested that if we were interested, we should consider working in the business and learning about it to make sure that was what we wanted to do. Wyn and I discussed that letter in great detail for almost two years. We agreed it would be a shame to sell a family business that was more than 100 years old. As we continued to talk, we decided that the worst that could happen was either not liking the work or failing. We decided we could live with both of those outcomes. But we also thought we didn’t want to look back in 10 years and say, “Wow, we really missed out on a great opportunity. Why did we sell it?” Wyn and I started on the Chevy sales floor because that was the biggest pain point at the time. We needed to sell more Chevrolets. We came in, and we started asking questions and learning. In January 2020, I became the dealer, and my husband became the general manager. Our goal is to ensure our two locations stay relevant and continue serving our community for another 100 years. Does the company employ other family members? If so, what roles do they have? My father is the CEO, I am the dealer principal, and Wyn is the general manager. Our three dogs, Mavis, Rebel and Cotton, are some of our best sales consultants . Our daughters may join the team someday. The dealership has survived every major catastrophe of the 20th century, starting with the 1918 flu pandemic and (at least so far) ending with the current COVID-19 pandemic. What’s the secret to surviving in difficult times? We have a saying around here: “Taking steps is easy; standing still is hard.” We know that we can make it through these WVADA is a great support system for dealers. They work closely with us to accomplish our needs and wants, and they help us solve our issues. The association offers education and communication with the legislators and a fabulous legal staff that understands the ins and outs of our complex business. Continued from the previous page wvcar.com 14 WVADA
challenges by focusing on the big picture and adapting. My family has survived difficult times because of flexibility, confidence, hard work and preparation for the future. What has your family learned from everything that has happened since the dealership opened? You have to surround yourself with the right people to succeed for so long. Good salespeople will make our customers want to purchase from us again, good service techs mean our service customers will come back every time their car needs to be serviced, and a great body shop team ensures that customers will turn to us when they have an accident. We believe in continuous improvement. Who has your main mentor been? My father. We share an office, which can sometimes be difficult; however, I feel lucky to have him here to spitball ideas and ask questions. He is a wealth of knowledge and loves the business, although he might tell you otherwise. He gives me the support I need to make decisions. I learn by doing, and he encourages and supports that. I heard a statistic from NADA about the success rates of successions at dealerships; the first to second generation has a success rate of 33%, the second to third generation has a success rate of 11%, and the third to fourth generation’s rate is 6%. I have my father to thank for keeping the business alive and passing on the opportunity. Are there any other people who have had a significant impact on your life that you would like to tell us about? Dr. Mike Stern and Bridget Mullen. Working with them was my first experience working with a husband-and-wife duo. He is an oral surgeon, and she runs the office. They have mastered working together, and they are a great example of how you can be successful with that. What do you think about the Ally TIME Dealer of the Year Nomination? I am very flattered by the nomination, and I feel fortunate to receive the honor. Still, the nomination isn’t about me. I didn’t create anything. It is really about the entire team carrying on a family legacy. The dealership was already here and doing well, and it just needed a face-lift. We want to progress and make a good thing better by making improvements. Ally donates $1,000 from each nominee to a 501(c)(3) charity you select. The charitable donations for finalists are $5,000, and the winner’s donation is $10,000. You already support many charities. Which charity did you select for this honor? Why? I chose the Children’s Home Society of Parkersburg, which is well-run and well-rooted in the community. There are different locations all over the state, but my dad started to help this one more than 20 years ago, and I wanted to continue the tradition as a tribute to my family. Also, now that I have a child of my own and one on the way, it is a little more near and dear to me to give back to children in need. We host a food drive for them several times throughout the year and are always looking for ways to help them in their mission. Why should WVADA dealers join the association? How does membership benefit its members? WVADA is a great support system for dealers. They work closely with us to accomplish our needs and wants, and they help us solve our issues. The association offers education and communication with the legislators and a fabulous legal staff that understands the ins and outs of our complex business. Their support is vital to our success. Without WVADA, we wouldn’t have the foresight to make business decisions that keep us in a good position to serve our community to the best of our ability. Continued on the following page Issue 4 2021 15 WVADA
I look forward to learning more from our partners at the WVADA, and I appreciate their hard work on our behalf. What is the biggest issue facing West Virginia dealerships in the next three to five years? West Virginia has a major issue with citizens leaving the state. According to the 2020 U.S. Census, our state’s overall population dropped 3.3% over the past decade. In Parkersburg, it’s almost double that amount of decline. We lost 6% of our population in 10 years. Our state needs to find ways to retain our citizens and attract people from out of state to relocate here. We also need to encourage trade schools and trade jobs such as service and metal technicians. These jobs are vital because they are the backbone of our communities. What are three pieces of advice you would give someone if you were mentoring them? 1. Find diverse work experiences when you are young. They will make you more adaptable and desirable as an employee in your chosen field. 2. Hire people smarter than you. 3. Pursue anything that is both terrifying and amazing. What advice would you give to other women who are thinking about getting into the automobile industry? I’d like to think that I’m capable of advising anyone interested in the automobile industry. Considering a job in the auto industry is a great first step. You will never be bored. Working in this industry is about more than just selling cars. I advise women in this business to seek out local women’s leadership organizations. I joined a women’s group a few years ago, and I’ve made great friends and contacts. It’s always nice to find others who can relate to your experience. The CEO of General Motors, Mary Barra, is a great example of a woman succeeding in this industry. Tell us about Shop Click Drive (for Chevrolet) and Online Shopper (for Mitsubishi). How have these programs helped your business during the pandemic? Our community and customers still like to do things in person, especially when buying a car. I don’t blame them. As much as I like the “Amazon Experience,” it isn’t a one-sizefits-all model. Aside from purchasing a home, purchasing a new or used vehicle is most likely an individual’s largest purchase in their lifetime. Personally, I would not want to purchase a vehicle without seeing it, driving it, and reviewing its features with a product specialist. Nevertheless, I want to offer all options to purchase – a Burger King “have it your way” experience. One person may want to facilitate a transaction from start to finish online, but someone else might prefer to walk the lot and purchase the vehicle in person. With solutions like Shop Click Drive and Online Shopper, we try to give consumers a choice. We legally need wet signatures, so our store is not set up just yet to purchase a vehicle from start to finish digitally, but it is in the works. The company motto is “A Tradition of Trust since 1915.” Explain how that led to the McClinton Million-Mile Warranty. We decided to launch The McClinton Million in 2020 when so many people faced an uncertain future. People deserve peace of mind. Many people are keeping their cars longer, so we thought it was only fair to offer an extended powertrain warranty to most of our customers. With the McClinton Million, powertrain issues are one less thing our customers worry about. Continued from the previous page wvcar.com 16 WVADA
Further, when so many nontraditional car dealerships are popping up, people need to know there are still some businesses that will be around five years from now. We listen to our customers, and they want to see us if there’s ever an issue with their vehicle. I strongly believe that this is a people business and always will be; consumers like to purchase things from people they like, trust and know. Your company offers the Roger Brown Tool Scholarship in honor of Roger Brown, who retired in 2020. How is that going so far? Body technicians are one of the hardest positions to fill. Sadly, there are not many young folks coming into this career. Those who do must often purchase a lot of tools, and our goal is to help minimize that stress and burden. We’re thankful for longtime loyal employees like Roger Brown, and we have this program in place to honor him and make our body shop more desirable to potential employees. What is your favorite car? The El Camino. What are you currently driving? A 2022 Mitsubishi Outlander. It looks like you have shop dogs and family dogs! That’s a lot of dogs. How did that come about? My family has always had dogs, and we love them dearly. They make everything better. We have a black lab, Mavis. She’s a wonderful pet as well as an incredible retriever. Mavis had a litter of puppies a year ago, and we kept one of the females, Rebel. She will get her first chance at a duck hunt this winter. Lastly, we have Cotton, an English Cocker Spaniel. She’s my shadow! They are all outstanding and so good with our daughter! It is a bonus to take them to work where our team and customers love them. Who doesn’t want to snuggle on a dog while signing paperwork for a new car!? Would you please tell us about your family? Family is everything. I am so thankful and blessed to be a wife, mother, daughter, sister, aunt, sisterin-law and daughterin-law, etc. I did not comprehend how much I would love being a mother, nor did I appreciate the love and devotion of my own mother until I had my daughter, Virginia Hayes. She is my greatest joy. What do you like to do for fun? My favorite hobby is fly fishing. Wyn taught me how to fly fish in 2006 when we first met in Wyoming. It is so peaceful and something you can do in the most beautiful places in the world. I love to be on the water with my family, my fly rod, a beer, and a packed lunch on the bank. It’s my happy place. Do you have any last words? I am honored and humbled by this nomination. I want to reiterate that it is not for me, but instead, it is for us, my entire team at McClinton. I would not be in this position without their support, hard work and patience. They believe in Wyn and me, and they trust that we are making the right decisions to continue this legacy. My father says he is fortunate to be born into a family business. Like him, I did not create anything, but rather, I am lucky to have the chance to continue “A Tradition of Trust” with the help of the McClinton team and the Mid Ohio Valley community. Thank you! t I am honored and humbled by this nomination. I want to reiterate that it is not for me, but instead, it is for us, my entire team at McClinton. I would not be in this position without their support, hard work and patience. They believe in Wyn and me, and they trust that we are making the right decisions to continue this legacy. Issue 4 2021 17 WVADA
2021 E-Titling Seminars For two weeks this past November, WVADA hosted 11 e-titling seminars in six different locations throughout the state to prepare key dealership personnel on the new digital title process that the DMV implemented statewide. Approximately 500 title clerks, managers, and F&I personnel attended the seminars. Electronic titles will help streamline the current process by creating a more efficient method of submitting paperwork to the DMV. Thank you to all those who attended. wvcar.com 18 WVADA
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COUNSELOR’S CORNER By Johnnie E. Brown, Esq., Pullin, Fowler, Flanagan, Brown and Poe, PLLC Implementation is going to require a team effort of ownership, management, technology specialists, and legal counsel. New Safeguards Rule Happy New Year, everyone. I don’t think it is too late to wish this to you. As we start this new 2022 year, I know we all hope and wish that COVID-19 will greatly diminish this year and inventory will improve. Unfortunately, in the midst of this uncertainty, the Federal Trade Commission is implementing new Safeguard Rules to protect the privacy rights of consumers for their non-public personal information (NPI). Importantly, please understand that this new rule will become effective on Dec. 9, 2022, but now is the time to start preparing. The National Automobile Dealer Association (NADA) has estimated that compliance will average $293,000 for startup costs and approximately another $275,000 to annually maintain. Further compounding this financial burden is that non-compliance can wvcar.com 20 WVADA
result in fines of $46,517 per violation. Now that I have your attention, allow me to provide an overview of the new rule. These changes are modifications to the Safeguards Rule that became effective in 2011 and caused most dealerships to implement an Identity Theft Protection Program commonly referred to as a Red Flags Policy. I remember drafting approximately 50 of these plans for our West Virginia dealers. When first adopted in 2011, the Federal Trade Commission (FTC) used a “reasonableness” standard which allowed a dealership to evaluate risks particular to it and take into consideration its location and history on such privacy violations. The new Safeguard Rules have abandoned this reasonableness standard and created a list of arbitrary requirements that a dealership must follow regardless of its size, volume, or historical experience with privacy rights violations or identity theft events. The new Safeguard Rules is very detailed, and my intent below is to provide you with a very high-level overview. Implementation is going to require a team effort of ownership, management, technology specialists, and legal counsel. My advice is to start now. I provided formal comments to the FTC as President of the National Association of Dealer Counsel (NADC) approximately Continued on the following page Issue 4 2021 21 WVADA
Continued from the previous page Periodically, a dealership will be required to evaluate and categorize security risks and threats, define the criteria they used to assess these risks and threats, and how a dealership will either mitigate or accept this risk. eighteen (18) months ago, and NADA has been intimately involved with the FTC and engaged in constant communication and advocacy with the FTC to lighten the impact of these Rules. One victory that did come from these discussions is that there is no requirement to hire a certified computer information systems specialist, whose salary can exceed six figures. Now the new Safeguard Rule requires the hiring or appointment of a “qualified individual,” which is a substitute for your old “program coordinator.” A dealership is allowed some flexibility for this position, but the person must be qualified to handle your data and be able to design or implement systems and procedures to oversee your particular data. Fortunately, these tasks can be outsourced to technology and security providers. The FTC is going to require a new written risk assessment and information security program. There are also requirements for written procedures to address how a dealership will respond to a breach of a privacy incident and written annual reports to your Board of Directors. Some more specific requirements, there will be the requirement for a data and systems inventory. This requirement applies to all your computer systems, not just those that store the NPI of consumers. A dealership will be required to inventory all electronic and computer equipment. A dealership will also be required to inventory all software programs and who as access to consumer information, such as vendors, and determine which employees have access to particular consumer information. The inventory could be as broad as a salesman’s mobile phone particularly if they have consumer NPI on the phone or access to it. NADA recommends this inventory be written. Periodically, a dealership will be required to evaluate and categorize security risks and threats, define the criteria they used to assess these risks and threats, and how a dealership will either mitigate or accept this risk. A dealership will also be required to determine how you will specifically address these issues. This issue is going to require the hiring of an IT security firm or person or greater consultation with your existing IT provider. The written security plan will be required to address certain regulatory required objectives and substantive areas. These are set forth in the FTC Safeguard regulation and are quite detailed and beyond the space limits of this article. Please understand that NADA is working on templates that can be molded to your particular dealership. Consequently, some help will be forthcoming. As stated above, a written incident response plan will be required and must address clear procedures for how a privacy violation will be handled. This will obviously require time to evaluate and decide how you will respond, who will be involved, and what specific tasks will be undertaken. The FTC wishes to make sure that a dealership has given a serious evaluation and thought to this. A dealership will then be judged how they followed this response plan in the circumstance of a privacy violation or identity theft event. Our technology systems will require encryption capability for information disseminated from our dealerships and multi-factor authentication for access to consumers’ NPI. This will further require system monitoring and periodic penetration testing and vulnerability assessments. Importantly, this also applies to vendors who have access to our systems. Consequently, communications and coordination with vendors need to be undertaken to implement the Rule by the end of this year. Dealerships are going to be required to have controls for access to consumer information. This will require the potential wvcar.com 22 WVADA
expenditures of monies for new software to accomplish this requirement, and there is an additional requirement to oversee management procedures to access consumer information. Interestingly, the Rule asks that consumer information be deleted after two years, which we, as dealerships, cannot do, but there are “business purpose” exceptions. Unfortunately, this means that dealerships are going to have to evaluate this, justify the business exception, and create more formalized document retention and destruction policies. Of course, all this is going to require initial and ongoing training for all personnel, which will be required to be documented and verified. Last, one of the most challenging tasks, after determining who has access to your customers’ information, is then reviewing the contracts of vendors and determining if the vendors are complying with the new Safeguard Rules. I would recommend reaching out to these vendors and requesting updated contracts or addendums which are Safeguard Rule compliant. They also need to communicate to you how they are becoming compliant with the new Safeguard Rule. This will be quite a challenge, so I recommend starting now. I have been informed that NADA is putting out a Driven guide soon with templates to consider. This will be very helpful, and in the legal world, forms are dangerous if applied blindly without thought and consideration about how you do business and an evaluation of your individual needs and exposures. I strongly encourage you to reach out to knowledgeable counsel, and as always, the Association stands ready to assist you. t Committed to Client Success federatedinsurance.com Commercial Insurance Property & Casualty Life & Disability Income | Workers Compensation Business Succession and Estate Planning | Bonding Federated Mutual Insurance Company and its subsidiaries* *Not licensed in all states. 20.09 Ed. 3/21 © 2019 Federated Mutual Insurance Company Brokerage | Leasing | Appraisal | Consulting 304-840-1781 | Quintie Smith at INVS@aol.com | 3818 MacCorkle Avenue SE Charleston, WV 25304 Office: 304-925-7000 | Website: realcorpinc.com An unmatched level of knowledge and experience in the real estate market. Commercial Real Estate Issue 4 2021 23 WVADA
BY THE NUMBERS wvcar.com 24 WVADA
To ensure that you pay only on the amounts you have made, now is the time to clean up any questionable items that may have accumulated on your dealership’s books over the last year. 2021 Year End Considerations Leon M. (Lonnie) Rogers, CPA/ABV/CFF is the managing member of Tetrick & Bartlett, PLLC and has been providing accounting, tax, valuation, and consulting services to automobile dealers since 1977. Tetrick & Bartlett, PLLC currently serves dealers in West Virginia, Virginia, Ohio, and Pennsylvania and is a member of the Auto CPA Group, a nationwide organization made up of 25 CPA firms specializing in services to automobile dealers. Lonnie can be reached at lrogers@tb.cpa or 304-624-5564. 2021 was a record year of profitability for automobile dealers. Hand in hand with this profitability is the income tax liability due on those profits. To ensure that you pay only on the amounts you have made, now is the time to clean up any questionable items that may have accumulated on your dealership’s books over the last year. The following items are suggestions for reviewing your accounting records and identifying amounts that may need to be written off or accrued as expenses. 1. Cash — Review bank reconciliations. Ensure that the amounts are reconciled to your general ledger and identify older reconciling items for propriety. 2. Receivables — Review aging of all receivables (contracts, vehicle, customer, warranty, finance reserves and incentives) to determine if they are collectible. Obtain explanations for any amounts outstanding outside of the normal operating cycle (15 days for contracts and 60 days for other types of receivables). 3. Open repair orders — Review your open repair order lists to determine if they all have valid reasons for being open. Obtain explanations for any repair orders open 30 days or more. 4. Prepaid expenses — Review prepaid schedules to determine that amounts represent valid unexpired expenses. 5. Vehicle Inventories — Perform a physical count of the vehicle inventories and reconcile them to the general ledger schedules. Review used vehicle values to determine if they represent the lower of cost or market. 6. Parts and other inventories — Reconcile physical counts to the general ledger. Review parts inventory and determine if obsolete items are included and should be written off. Dispose of any amounts written off. 7. Property and equipment — Review additions to fixed asset accounts to determine if the items charged to those accounts meet your company’s capitalization criteria (typically a unit cost of $2,500 or more). Review additions to buildings and leasehold improvements to determine if they may qualify as a repair or refreshment. 8. Accounts payable — Ensure that all vendor invoices have been entered in to accounts payable and reconciled to the vendors statements. 9. Floorplan liability — Reconcile the floorplan statements from lending institution to the accounting records. 10. Vehicle Lien Payoffs — Review to determine that payoffs are being made in a timely manner and that deficiency notices are sent to customers when appropriate. 11. Title Work — Review to determine if title work is being processed within the prescribed time frame and that liens are being perfected within the limit established by state law. 12. Accrued and withheld tax liabilities — Determine if payroll, sales, and property tax liabilities are being paid when due and if the accounting records reflect the correct liability balance. 13. Payroll — Determine if accrued payroll has been reconciled to the payroll records and reflects the appropriate liability. Performing these procedures at the end of and throughout the year will help ensure that you are making tax and financial decisions based upon the most accurate data available. t Issue 4 2021 25 WVADA
www.carsignment.com Matt White | 304-633-5467 | matt@carsignment.com Halsey Cory | 304-654-6540 | halsey@carsignment.com Partnered with some of the most trusted companies in the industry • Professional photo and merchandising services • Digital and website consulting • Inventory Management • Local and Technical SEO (Google My Business support) • Search Engine Marketing • YouTube video pre-roll • Facebook advertising • Sales and Fixed-Ops programs • Digital retail solutions Full service automotive digital marketing agency, owned and operated in West Virginia since 2005. wvcar.com 26 WVADA
ALY_NY-1953_AllyAccelerationAd_SinglePage_7.5x4.625_r2.indd 9-14-2020 10:23 PM Olivia Konys / Olivia Konys 1 Job Client Creative Media Type Color Space Safety Trim Bleed Pubs Pub Date ALY_NY-1953_AllyAccelerationAd Ally None Print SWOP None 7.5” x 4.625” 7.625” x 4.75” WVADA & NCDU 9/24 Job info None Notes Studio Artist Producer Olivia Konys Daniel Kim Approvals Fonts Averta (Regular) Images ALLY_ACCELERATION_PRINT_FULLPAGE_ edit_r6.psd (CMYK; 339 ppi; 88.39%) Inks Cyan, Magenta, Yellow, Black Fonts & Images Saved at None from UNRNYC0751-OKonys by Printed At ©2020 Ally Financial Inc. ALY_NY-1953_AllyAccelerationAd_SinglePage_7.5x4.625_r2.indd 1 9/15/20 5:50 PM NADA offers a custom 401(k) program that is designed for dealers and their employees. 703.448.5814 | LRose@nada.org ARE YOU PROVIDING THE NECESSARY TOOLS? Issue 4 2021 27 WVADA
In the Community Warm a Heart, Give a Bed On November 8, Cole Subaru prepared, bagged, and served over 240 meals to our community with help from the Key Club at Princeton High School. It's always great to see our members and their team giving back to the community! t wvcar.com 28 WVADA
McClinton Chevrolet On November 7, McClinton Chevrolet delivered Thanksgiving donations to the Children's Home Society of WV, Parkersburg Site, and the Mid Town Family Resource Center. This was one of their biggest food drives to date. We want to thank everyone in the community who brought items in for this cause and their employees who raised a lot of money to buy donations this year. t Last year one of the McClinton Chevrolet lost one of its longtime employees, Dan Talbott. Every year Dan donated several bikes for our company toy drive. Starting last year, we decided to keep the tradition going. So, we’re donating these bikes in his memory. General Manager Wyn Bowden is posing in the showroom with three donated bikes for the local Toy for Tots. Ball Toyota of Charleston Shawn Ball with Ball Toyota of Charleston raised $74,000 in just six days to make sure children in our state have everything they need for school. Great job; it’s always great when our dealers give back to causes that mean the most to them!t Issue 4 2021 29 WVADA
In the Community On December 15, the Dutch Miller family of dealerships and the whole Miller family donated four cars to the Good News Mountaineer Garage. The Dutch Miller family of Dealerships is a valuable part of our community and we thank them for all they do. t Congratulations to Straub Nissan – they were named the recipient of the 2021 Nissan Award of Excellence! wvcar.com 30 WVADA
Weimer Automotive Group Weimer Automotive Group was pleased to host a group of amazing children and their foster parents. Many thanks to the staff at the Potomac Center for allowing us to serve the children, Tasty Impressions (Becky Franz) for a great meal, JR Murray for bringing us tables, chairs, and table linens and Chip Combs from WELD for being on site and doing a live broadcast to help cover our event. Also a huge thank you to our employees and the members of the community that purchased gifts for the children. t Harry Green Chevrolet Nissan said goodbye to a legend, Frank Smith. Frank is retiring after 37 years. Congratulations to Frank Smith, we hope you enjoy your time! t Congratulations to Mark Lemon, he retired from Matheny Motors after 35 terrific years. We hope you enjoy your time! t Harry Green Matheny Motors Issue 4 2021 31 WVADA
Running a dealership comes with its share of uncertain terrain. But one thing is certain. Our Dealer Financial Services team is dedicated to being by your side with the resources, solutions and vision to see you through. Chuck Massa chuck.massa@bofa.com 513.316.4287 bofaml.com/dealer Making business easier for auto dealers. Especially now. “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. ©2020 Bank of America Corporation. All rights reserved. 3235016 12-20-0021 Ru ning a dealers i i i rt in te rain. But one t i i . i i l rvices tea is dedicat t i rc s, solutions and visi Chuck Ma sa chuck.ma sa f . 513.316.4287 bofaml.co /dealer i i i l . “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instrum nts are performed globally by banking affiliat s of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securiti s and fina cial instruments, and strategic advisory, and other investment banking activities, re performed globally by investment banking affiliates of Bank of America Corporation (“Inv stment Banki Affiliates”), inclu ing, i the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members f SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Cleari g Corp. are register d as futures c mmission me chant with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. ©2020 Bank of America Corporation. All rights reserved. 3235016 12-20-0021
ONE LAST THING ... Did you know that you can enjoy your association news anytime, anywhere? Scan the QR code or visit: wvada-news.thenewslinkgroup.org Check it out! The new online article build-outs allow you to: • Stay up to date with the latest association news • Share your favorite articles to social channels • Email articles to friends or colleagues There is still a flipping book for those of you who prefer swiping and a downloadable PDF. Are you ready for growth? Advertise in this magazine and watch your revenue soar. A place where your company gets wings! Space is limited. Contact us today to get your spot. 801.676.9722 | 855.747.4003 sales@thenewslinkgroup.com Issue 4 2021 33 WVADA
MEET OUR TEAM wvcar.com/meet-our-team Jared Wyrick President BOARD OF DIRECTORS EXECUTIVE COMMITTEE Wally Thornhill NADA PAC Chair Thornhill Auto Group Bill Cole WVCAR PAC Chair Bill Cole Automotive Richard Stephens NADA Director Stephens Auto Center T. R. Hathaway Immediate Past Chair Superior Toyota Hyundai Roberta Olejasz Chair Bob Robinson Chevrolet, Buick, GMC, Cadillac Keith Powell District 5 Director Yes Chevrolet/Ford Nick Green District 2 Director Harry Green Chevrolet Nissan Austen Weimer District 3 Director Weimer Auto Group Dennis Sheets District 6 Director Sheets Chrysler Dodge Jeep Ram, LLC Don Warner District 4 Director Warner Kia Lou Thomas District 4 Director Louis Thomas Subaru Ginger Fato District 1 Director Straub Automotive Group Mike Ferns Jr. District 1 Director A & B Kia DIRECTOR AT LARGE Jonathan LeRose Director At Large Midstate Automotive/ Northside Lee-Anne Cole Greene Director at Large Cole Chevrolet/Cadillac/ Buick GMC Haley Justice Administrative Assistant Mike Matheny Emeritus Matheny Motors Tim Matheny Exclusive Truck Dealer Matheny Freightliner Suzanne Persinger District 5 Director Moses Honda Volkswagen Jason Minsker District 2 Director Buckhannon Toyota Fred Timbrook District 3 Director Timbrook Ford & Chevrolet Steve Talbott District 6 Director Greenbrier Ford & Chevrolet Rodney Lerose II Director at Large Midstate Automotive/ Northside Charles Rashid Vice Chair Charleston Mitsubishi JR Toothman Secretary/Treasurer Toothman Ford West Virginia Automobile Dealers Association 1618 Kanawha Blvd E Charleston, WV 25311 Phone: (304) 343-4158 wvcar.com
Advertising & PR - Opportunity to Reach Consumers More Valuable “Why Buy Here” More Sales + More Gross + Buyers Feel Involved Bring Customers Back to the Service Drive Over & Over Let Us Help You Make a Real Difference in Your Community and Increase Positive Publicity! Let’s give BIG THANKS for all of the little blessings this year... Capital Automotive,Toothman Ford andToothman Sowers Ford have partnered up and pledged $1 million in donations to WVU Children’s Hospital over the course of the next ten years. We believe that giving back to the community is the best way of showing gratefulness for all we have. “Appreciation can make a day, even change a life.” - Margaret Cousins WWW. CAP I TAL -AUTOMOT I VE . COM This Could be Your Ad! Have You Set Your Goals for 2022? Let’s talk about your dealership goals! Call us at 855-919-8877 or email inquiry@capital.email
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