orange countyTHE OFFICIAL PUBLICATION OF THE ORANGE COUNTY AUTOMOBILE DEALERS ASSOCIATIONwww.ocada.orgPAGE 24Election ResultsPAGE 14Top Five Consumer Complaints Against Dealers2nd Quarter 2019, Volume 65, Issue 2orange countyPAGE 10Abandon Auto Shows at Your Own Peril by Peter WelchORANGE COUNTY DEALERS AT THE CAPITOLPAGE 14Dealers’ Economic Impact on Orange CountyA Limited Liability Partnership, including Professional Corporations 949.608.6900 | ferruzzo.com ATTORNEYS AT LAW | Our Practice Is Rooted In Strong RelationshipsBUSINESS LAW | LITIGATION | ESTATE PLANNING | REAL ESTATE | TAX | EMPLOYMENT PRACTICESServing the Dealer Industry for Over 38 YearsWe are pleased to announce that Sean Morrissey joined our Firm. Sean will be a key asset for the services we provide to all our auto clients. Sean arrived at Ferruzzo with extensive and exceptional litigation experi-ence representing General Motors LLC and Ford Motor Company in hundreds of Song-Beverly Consumer Warranty Act, Magnuson-Moss Warranty Act, Consumer Legal Remedies Act, Unfair Competition Laws, and fraud matters. Attorneys at Ferruzzo & Ferruzzo, LLP have represented new vehicle dealerships, collectively for over 180 years - auto dealership related! Buy-Sell Agreements: Tom Ferruzzo - 38 years, Jim Barone - 34 years, Litigation: Jim Ferruzzo - 38 years, Greg Ferruzzo - 26 years, Succession Planning: Jim Leese - 25 years auto, 40 years total, Real Estate Transactions: Gordon Scholte - 19 years auto, 39 years total.Transactions for Dealerships Negotiating and Drafting Buy-Sell Agreements Estate Planning for Dealers Negotiation of Computer Software, & Hardware agreements Negotiating Capital Loan and Lender Agreements Real Estate Acquisitions and Financing Relocations Negotiation of Executive Compensation Negotiating Government Loans and Incentive Agreements Agreements and Buy-Ins Dealings with ManufacturersOC DEALER is a Publication of the Orange County Automobile Dealers Association3737 Birch Street, Suite 220 • Newport Beach, CA 92660www.ocada.orgPhone: 949-428-5050CONTENTSorange county5 OC Auto Show By the Numbers 6 President’s Message8 OC Dealers Continue to Push for Stronger Franchise Protections10 Abandon Auto Shows At Your Own Peril12 Get To Know Your Assemblywoman Cottie Petrie-Norris14 Dealers’ Economic Impact on Orange County16 OCADA Scholarship Spotlight18 OCADA’s 55th Anuual Golf Tournament22 Processing Compliance in the F&I Department (Part II)24 OCADA Celebrated Orange County Officers Who Brought Auto Thefts Down in 2018 26 Ask Alison: Employee Online Benefits Administration System - The Top 5 Benefits to Your Dealership27 Welcome to Our New Associate MembersCALENDAROF EVENTSorange countyBOARD OF DIRECTORS PRESIDENT David SimpsonSimpson Buick GMC Cadillac of Buena ParkSimpson Chevrolet Garden GroveSimpson Chevrolet IrvineVICE PRESIDENTScott WadeDavid Wilson’s Villa FordFord & Mazda of OrangeTREASURERJared HardinHardin Automotive GroupAUTO SHOW CHAIRMANBen BonfoeyThe CAR GroupDIRECTORSMiles BrandonCapistrano VolkswagenCapistrano MazdaJames GrahamSanta Margarita FordSanta Margarita ToyotaK.C. HeidlerTom’s Truck CenterJohn OhLexus of WestminsterEXECUTIVEDIRECTOR/SECRETARYJohn SackrisonINTERESTING OC AUTO FACT4Annual Meeting at the Auto Show October 4, 2019 OC Auto Show October 3-6, 2019 Anaheim Convention Center©2019 Orange County Automobile Dealers Association. All rights reserved. OC Dealer is published four times each year by OCADA and is the official publication for the association. The information contained in this publication is intended to provide general information for review and consideration. 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 specific circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the OCADA, its board of directors, or employees. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. OC Dealer is a collective work and as such, some articles are submitted by authors that are independent of OCADA. While OC Dealer 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 from OCADA. For further information, please contact OCADA.ORANGE COUNTY DEALERSHIPS GENERATE OVER $1 BILLION IN TAX REVENUE, OF WHICH $95 MILLION GOES DIRECTLY TO ORANGE COUNTY CITIES.5 3737 Birch Street, Suite 220, Newport Beach, CA 92660 • Phone 949-428-5050 • www.ocada.org April Auto Outlook UPDATE Most Researched Used Vehicles on KBB.com in Orange County 4/1/19 - 4/30/19 Top 20 Researched Used Cars Number of Searches Number of Searches Orange County Dealerships employ 12,500 team members OC Auto Fast Fact Used Car Models Used Car Models by Year 1 Honda Civic 2016 Honda Civic 2 Toyota Camry 2016 Honda Accord 3 Honda Accord 2007 Toyota Camry 4 BMW 3 Series 2012 Honda Civic 5 Toyota Corolla 2008 Honda Civic 6 Toyota Prius 2016 Toyota Corolla 7 Nissan Altima 2015 Honda Civic 8 Mercedes-Benz C-Class 2005 Honda Civic 9 Ford Mustang 2016 Toyota Camry 10 BMW 5 Series 2009 Toyota Camry 11 Mercedes-Benz E-Class 2017 Honda Civic 12 Lexus IS 2010 Toyota Prius 13 Lexus ES 2012 Toyota Camry 14 Volkswagen Jetta 2004 Honda Civic 15 MAZDA MAZDA3 2013 Honda Civic 16 Nissan Sentra 2011 Toyota Camry 17 Ford Focus 2010 Toyota Corolla 18 INFINITI G 2010 Honda Civic 19 Subaru Impreza 2006 BMW 3 Series 20 Hyundai Elantra 2011 BMW 3 Series Used SUV & Truck Models Used SUV & Truck Models by Year 1 Honda CR-V 2016 Honda CR-V 2 Toyota RAV4 2016 Toyota RAV4 3 Lexus RX 2016 Lexus RX 4 Toyota 4Runner 2016 Mazda CX-5 5 Toyota Tacoma Double Cab 2017 Honda CR-V 6 Jeep Wrangler 2015 Honda CR-V 7 Ford F150 SuperCrew Cab 2015 Lexus RX 8 Toyota Highlander 2015 Toyota RAV4 9 Honda Pilot 2013 Ford F150 SuperCrew Cab 10 Jeep Grand Cherokee 2007 Lexus RX 11 Ford Explorer 2018 Toyota RAV4 12 Chevrolet Tahoe 2017 Toyota RAV4 13 BMW X5 2017 Lexus RX 14 Subaru Forester 2017 Toyota Tacoma Double Cab 15 Ford Escape 2016 Toyota Tacoma Double Cab 16 Ford F150 Super Cab 2007 Honda CR-V 17 Chevrolet Silverado 1500 Crew Cab 2016 Toyota Highlander 18 Acura MDX 2018 Ford F150 SuperCrew Cab 19 Mercedes-Benz M-Class 2014 Ford F150 SuperCrew Cab 20 Nissan Rogue 2008 Honda CR-V Top 20 Researched Used SUV & Light Trucks OC AUTO SHOW ATTENDEES BY THE NUMBERS 41/2 HOURS The average time consumers spent at the OC Auto Show 57% Added one or more brands to their consideration list showing they are active shoppers $100K+ INCOME The majority of guests are much more affluent than the local market 81% OC Auto Show guests are in the market for a new vehicle in the next 12 months CAPITALIZE ON THIS HUGE AUDIENCE OF AFFLUENT IN-MARKET NEW VEHICLE BUYERS COMING OCTOBER 3-6 • YOUR OC AUTO SHOW COMING OCT. 3-66President’sMessageDavidSimpsonSimpson Buick GMC Cadillac of Buena ParkSimpson Chevrolet Garden GroveSimpson Chevrolet Irvine“Our guests’ median income is over $100k and the auto show experience influences their vehicle purchase decision more than any other media channel - only rivaled by digital.”After reading Peter Welch’s recent article Abandon Auto Shows at Your Own Peril in Automotive News (reprint on page 10), I wanted to share some local context to why Peter is right about auto shows. First, here are the facts: 81% of OC Auto Show attendees plan to buy a new car in the next 12 months and they spend over 4 hours at the auto show shopping for their next vehicle. While attending the auto show almost half test-drive a vehicle and 57% add a brand to their shopping list. Our guests’ median income is over $100k and the auto show experience influences their vehicle purchase decision more than any other media channel - only rivaled by digital.So what’s not to like about auto shows? Nothing, but as we have all seen before, OEM marketing gurus can become easily enamored with the newest shiny object whether they are fashion week sponsorships, pop-up mall displays, or vehicle subscriptions. Some try to start a new trend while others rush to follow. Unfortunately, these new fascinations can quickly eat up resources at the expense of valuable marketing like Auto Shows and often lead to a drop in market share and sales. Don’t get me wrong, I am all for trying new things – I am just not willing to abandon auto shows or anything else that is proven to move the metal. Has any manufacturer ever done this and gained market share? Please join Peter Welch and I by speaking up now, before your manufacturer makes bad decisions that hurt your bottom line and market share.$2.75 DESIGNATSIGNATSIGNED AREASHIGHER© 2018 SFVNlatimes.comWEDNESDAY,DAY,DAMARCH 28,2018WASHINGTON —TheTrumpadministration’splan to ask everyone inAmericaAmerica whether they areU.S. citizensas part of the2020 census couldcostCali-fornia billions of dollars andaseat in Congress, state offi-offoffcials warn.Whether CaliforniaCalifCalifandother states with big urbanururareas that face similar ef-fects can do anythingaboutthe change remains to beseen. They arerushing tocourttochallengethe ad-ministration’s authoritytotack ontothe survey aques-tion that hasn’t been testedin decades.CaliforniaCalifCalifAtty.Gen. Xa-viervier Becerra warned thattheaddition of the question“couldtranslate into severalmillion people not beingbeingcounted.” LegalLegLeg scholars saysayCalifornia and its allies faceatough fight.The decision to addasin-gle question on the census,whwhichthe administrationannounced lateMondayynight, may seem an obscurematter, but it could give theTrump administration an-other levertoshiftphifhifowererand federal resources awayayfrom blue states toward redones, muchashappenedwithwith the recent tax lawwlalachangesangang that disproportion-ately favofafa redvoters in Re-publican regions.The move wasmet withStateStateStatsues toblblockcensuschangechangechangTrump administrationaddition of citizenshipquestion will lead toundeundercountand hurtCaliforniaCalifCalif,critics say.sasaBy Evan Halper[S[Seeee Census,Census, A10A10]]Anaheimremovedbusbenches near Disneyland inresponsetocomplaintsabouthomelesspeoplesleeping on themand loiter-ing nearbynearnear .bybyThen OrangeCountyypushedhundreds out of anencampmentalongtheSanta Ana River trail. Offi-OffOffcialshavealso vowedtore-move the tent city that hastaken root at the Santa AnaAnaCivicCenter.But as the countyandsome of its citiestakestepsto push out homeless peo-ple, the problem of wherethey should go remains un-solved. And it became abun-dantly clear Tuesday thatfinding places willingtohostnewhomeless shelters is go-ing to be ahugepoliticalchallenge.allenge.allengMore than 1,000peopleconvergedon the OrangeCounty BoardofSupervi-sors meeting to protest aaplan to relocatethose re-movedfrodfrodf mthe river en-campment to temporaryyshelters in Irvine, Hunting-tonBeach and LagunanaNiguel.The large protest con-cluded with a4-0 vote toscrapwhat had been thecenter of an ambitious plan,leavingleavingleathe affluenaffluenafftcountytyat SquareOne as it faces aRESIDENTSof Irvine, HuntingHuntingtonton BeachBeach andand LaLagugunana NiNiguguelel protestprotest outoutsideside anan OrangOrangeCeCountountyByBoardoard ofof SupervisorSupervisorsmsmeeeetitingng TuesdaTuesday.y.TuesdaTuesdaTuesdaTuesdaIrfan Khan Los Angeles TimesPLANPLPL FORRSHELTERSHELSHEL SDROPPEDDRDRAFAFTERPROTPRPR ESTBy AnhDo,CindyCarcamoand Joseph Serna[S[Seeee HomelHomeless,ess, A1A11]1]A11]A1A11]A1Foryears,Democratshavehahadreamed of turning OrangeCounty,the birthplace of RichardNixon, blue.Or at least some shade of purple.The county— once sucha GOPstrongholdthat RonaldReagandubbed it the place where“all thegood Republicansgotodie” —ischangingdemographicallyand,therefore, politically.icallyicallyGrowing Latino and Asian popu-lations havehahaplaced whites in the mi-nority. HillaryClinton in 2016 becamethe first Democraticpresidentialcan-didatetowin theresince the GreatDepression. Andthe party is hopingto flip several Republican-held con-gressional districts thatvoted forClinton.Still, OrangeCOrangOrangountyprovedagainover the last fewweeks that its con-servativesideisaliveand well, espe-cially when it comes to illegal immi-gration.OnTuesday,tuesdayuesday he Board of Su-pervisors added apowerful voice to agrowing backlash againstagagCalifornia’spro-immigrant policies when it votedto fight the state’sso-called sanctu-arylarar aws.In doing so, the county has becomean epicenter of the resistance to theanti-Trump movement that hasdominated left-leaninleflefgCaliforifif nianiapolitics since the president took of-ofoffice. The stanceagainst efforts to pro-tect peopleinthis countryillegallylycomes ageneration afteafaf rOrangeCountybecame the birthplace of Pro-position187,the divisive1994ballotO.C’s conservativava vetitiside is alivealiali and wellCounty is centerof‘sanctuarystatetata ’defianceFOEFOESOSOFSBSB 5454 cheercheer afafterterafterafafterafOrangOrangeCeCountountysysupervisorupervisorsvsvoteote toto fightght thethe stastate’ste’s so-cso-calledalled sanctuarysanctuary lalawswslawslalawsla..Irfan Khan Los Angeles Times[See Sanctuary, A11]A1A1By CindyCarcamo,HaileyBranson-Pottsand Alene TchekmedyianWASHINGTON— TheU.S. and South Koreahavereached an agreement inprinciple to amend adec-ade-old free-trade pact thatPresidentTrump used tocall “horrible” and a“disas-ter” —his firstsuchdeal andavictory, albeitamodestone, for his toughenedap-proachtoAmerica’secono-mic partners.Under the deal, SouthKoreaagreedtolimit itssteelexports to the U.S. andmade concessions on autoimports. In return, the U.S.agreed to exemptSouthKo-reafroafroaf m the 25% tariff onsteelthatTrumpan-nounced this month.The deal removesamajororpoint of frictionbetween thetwoallies at amomentwhenthey’repreparing for nego-tiations with NorthKoreaeaabout its nuclear program.Relations between the U.S.andSouth Korea havehavehabeenstrainedatseveral points inthe last year as Trump hasrailed against an $18-billiontrade deficitdeficitdefand denouncedthe U.S.-Korea Free TradeAgAgreement, known as Ko-rus.Trump has called Korusa“horrible” agreement that“destroyed” U.S. industry. Ayeyear ago, he threatened toterminatethe wholeagree-Modest?Trump?His firsttradedeal isBy Christi Parsons[S[Seeee TraTrade,de, A8]A8]State steps into investigatepolice killingAs protestsmountin Sacramento,California’slifornia’slifDepart-ment of Justice willoversee the city’spolice inquiry into theshooting of StephonClark. CALIFORNIA, B1Facebook CEOmaytmaytmaestifyThree congressionalcommittees havehavehainvitedinvitedinMarkZucker-berg to speak aboutthe social network’shandlingofuserdata. BUSINESS, C1Weather: Sunny.L.A. Basin: 78/56. B6YIWU,China — You— You— Y ’llfind Easter one floor up fromthe fidget spinners, aroundthe corner from the sax-playing Santas, past the “Ilove Croatia” shot glassesand iPhone-shaped ash-trays, and across from thestatuettesofJamaican mensmoking marijuana.There, Yang Wei, 30,maintains achild’sbed-room-sized worldofEasterwowonders.She sits amidshelves overfloerfloerf wing withstuffed rabbits, plastic eggswithwith glued-on bunny ears,and countless fuzzychicks,like nonedible marshmallowPePeeps.eps. MoMostst ofof itit isis boundbound forforthe U.S.,delivered by thecrate-load.“We h“We h“Wave toy designerswho go to the U.S. or Europeto do research,” said Yang,manager of the JiangsuTaizhou CityWenyWenyW haoHand-icraftPicraftPicrafroductFactory.“Then they come backandcome up with toys thatwillsuit the markemarkemar t.”Chances are, if you’ve ex-perienced Easter in any form—a gift basket, astorefrontdisplay—you’veseenanaproduct that, at some point,passedthrough the Interna-tionalTrade CityinYiwu, aacityof1.5 million peopleabout 160miles south ofofShanghai. It’s the largestwholesalemarket intheEaster bunny translateanslateansla stomoneyYiwu,China,isthe birthplace of manysmanysman pring holidaytholidaytholida rinketsBy Jonathan Kaiman“I THINKEaster is forJesus, likehow Christmas isfoforSrSanta,”anta,” sasaysys YaYangng WeWeiaiaththerer stallstall inin YiYiwu,wu,Yiwu,YiYiwu,YiChina.China.Matjaz Tancic ForThe Times[S[Seeee ChinChina,a, A4]A4]Anaheimrmrmremovedbdbdbusbencbencbenches nearnearnear Disneyland inininresponsetocomplaintsntsntsaboutabouthomelhomelhomelesspeoplpeoplpeopleslesleeping ononon thethethemandndnd loiloiteteter-r-r-ing nearbybybybybynear .bybyThen OrangeCountyyypushesheshedhdhdhundredsedseds outout ofof anencampmentalongalongthethetheSanta Ana Riverer trail. Offi-OffOffcialcialcialshavaveaealsolsolso vowedtdtore-e-move thethethe tetetent cicicitytyty thatthatthat hastakenen rootot atat thethe Santa AnaAnaCiviCiviCivicCenenter.But as thethethe countuntyandsome ofofof itsits citiecitieststakakakestetepstoto pushsh outoutout homelhomelessessess peo-PLPLANPLPL FOFORRRRSHELTERSHELSHELSHEL SDROPPEDDRDRAFAFTERPRPROTPRPR ESTBy AnhDo,o,CindyCarcamoarcamoand Joseph SernaForyears,DemDemocratsocratshahavehahadreamedeamed ofof turning OrangeCeCounty,thethe birbirbirthplace of RicharhardNixon, blue.Or atatat leastleast somesome shadeshade ofof purple.The cocountunty— once sucuchahaha GOPstrongholongholdtdthat RonaldRdReageaganandubbeded itit thethe place where“e“allall thegood Republicansgsgotododie” —ischangingingdemographicallyand,and,thethetherefore,e, politpoliticallyically.icallyicallyGrowinging LaLatinotino and Asian popu-popu-latlationsionsions hahavevevehavehavehavevehavehavehavehavehavehaplaceded whitwhiteses in thethethe mi-nority. HiHillararyClinton in 2016 becamethethe first Democraticpresidentialcan-an-didatetowinin therthertheresesesince thethe GrGreattDeprpresession.on.on. Andthe parpartyty isis hopingto flip seveveveralral Republican-held con-gressionalessional distrdistrictsicts thathatvtvototed forrClintntnton.Still,Still, OrangeCOrangOrangountntyprovedadagainovovovererer thethe last fewweeks that its cocon-servativativesidideisaliveand well, espe-e-e-cially when it comesmes to illegal immi-grationation.O.OnTuesdayuesday,t,tuesdayuesdayuesdayuesday he BoBoard of Su-pepervrvisors adadded apapapowerful voice toto aaagrowing backlashpro-immigo-immigrantrant policiesto fight the state’ararylar awaws.In doing so, thean epicepicepicenterer of theanti-Trump modominatdominated left-leanint-leaninleflefpolitics sincesince thethefice. The stastanceagatectctct peoplpeopleintnthiscomes ageneratiCountybybecame theposition1n187,t,theO.C’s consconservativavavavavavava vetititiside isisis alialialivevealialialialialialiali and weweweCounCounty is cecenterof‘sanctsanctuaruarystatatetata ’d[S[SBy CindyCarcamo,HaileyBraransnson-Pon-Pottsottsand Alene TchekmedyianOrange County,we’ve got you covered.Reach Orange County auto buyers where they live with theLos Angeles Times and Times OC in print and online.Advertise now! Call Wendy Hultgren at 626-364-5459LAT18-AS0068OC Dealers Continue to Push for Stronger Franchise Protections in California Many thanks to the Dealers who traveled to Sacramento for Dealer Day this spring. The in-person meetings they took with Orange County Representatives and Capitol staff are invaluable, as our legislators learned about the economic impact dealerships make and the critical role that franchise protection laws play in the success of dealer business. Conversations focused on AB 179 which is written to safeguard franchise protections and pass these improvements into California law:• Clarifies warranty reimbursement to include retail rates for parts and labor through a specified methodology.• Introduces an appeal process to adjust labor rates in response to manufacturers’ manipulation of time.• Responds to facility upgrade requirements, by providing that an improvement is not reasonable within 10 years of the last facility improvement. www.lslcpas.comBreaSacramentoFocusedon YOUFocused on your:• Accounting• Taxes• Audit• Review• Bookkeeping• Internal procedures• Cash flow• Consulting servicesDonald Slater, CPA Automotive Services Partner donald.slater@lslcpas.comMike Mangold, CPA Automotive Services Partner mike.mangold@lslcpas.comDavid Myers, CPA Automotive Tax Partnerdave.myers@lslcpas.comPut our experience to work for you.Since the 1940’s we have provided a complete range of services to the owners of dealerships and other automotive related businesses.Santa Ana(714) 672-0022Thank you to the Dealers who made the trip to the Capitol and are making a difference! 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