CATA Bulletin a biweekly newsletter

official Web site of CATA dealers Volume 100, No. 6 March 31, 2003

TV added to CATA ad campaign May 23 deadline to comply with rule to safeguard customer information An advertising campaign tion, as part of the campaign that touts Chicago area new- that is funded by the Chicago The clock is ticking to- tions to guard your car dealers as the best source Automobile Trade Associa- ward a May 23 deadline for nonpublic personal informa- to buy used vehicles and to tion. In the TV spot, a financial institutions, includ- tion.” The Safeguards Rule service vehicles will add woman will convince her ing dealerships, to comply is that federal regulation ref- television to the mix by late husband that it makes sense with a new FTC mandate re- erenced in the privacy no- April. Radio spots carrying to use a new-car dealer for garding how any sensitive tice. that message began airing in service—even as mundane information obtained from The National Automobile late December. as oil changes—because of customers is treated. Dealers Association pre- NBC5 Chicago will pro- the expertise of the service The FTC’s “Standards for pared a 48-page guide to duce a 30-second commer- department staffs. Safeguarding Customer In- comply with the new regu- cial that will air on that sta- SEE CAMPAIGN, PAGE 4 formation,” or Safeguards lation. A complimentary Rule, is in addition to, yet copy reached all NADA independent of, the members last week. Addi- 2003 CATA Board of Directors commission’s Privacy Rule, tional copies can be ordered which took effect in July at 800-252-6232 ext. 2. Officers 2001. The Privacy Rule is In an age of growing in- Mike McGrath, Chairman 773-342-6300 also referred to as the stances of identity theft, the Casey Wickstrom, Vice Chairman 630-529-7070 Gramm Leach Bliley Act. Federal Trade Commission Art Kelly, Treasurer 708-499-1000 Terry D’Arcy, Secretary 815-744-5900 In essence, the Privacy intends for the new rule to Jerry Cizek, CATA President 630-495-2282 Rule regards how financial shore up sloppy practices Directors institutions share any infor- that invite such theft. Lee Drabek 773-631-9000 mation they obtain from con- Sources of FTC horror in- Steve Foley 847-564-4090 sumers who secure or merely clude deal jackets that are John Guido 847-870-1300 apply for financial products left overnight on desktops, or Bill Hartigan 630-629-3300 or services. The Safeguards sensitive customer informa- Bill Hawkinson 708-599-6000 Rule addresses how that in- tion that can be called up on Bill Jacobs 815-725-7110 formation is protected. computers in an unautho- Bob Loquercio 847-741-2100 The Privacy Rule requires rized department. Dan Martino 708-418-8800 Kevin Mize 847-297-5700 dealers to make a statement As an ongoing condition John Phelan 708-442-4000 in their privacy notices about under the Safeguards Rule, Mark Scarpelli 847-395-3600 their information safeguard- the FTC requires every Jeff Sullivan 847-392-6660 ing practices. A common dealer and other “financial Dave Taylor 815-935-7900 statement: “We maintain institution” to develop, Dan Wolf Sr. 630-717-1578 physical, electronic and pro- implement and maintain a Board members welcome any questions, concerns cedural safeguards that comprehensive, written In- and comments from their fellow CATA members! comply with federal regula- SEE SAFEGUARDS, PAGE 3 2 CATA Bulletin March 31, 2003

Personal digital assistants helping dealers cut paperwork Wireless technology tracks customers pricing, inventory

Jeff Higgins doesn't shuffle paper anymore when he sells the country. The price for the system ranges from $2,500 to new cars. Higgins and the rest of the sales staff at Toyota of $3,500 a month. Bloomfield in Bloomfield Hills, Mich., now use a personal "Instead of running back and forth between customers digital assistant and stylus instead of filling out mounds of and the back office, we're taking 30 minutes to 40 minutes paperwork. out of the whole new-car buying process and improving cus- "I think it's cool," he said. "It lets me do everything faster." tomer satisfaction along the way," said Chris Carey, Strong- The car dealership is one of only two in the Detroit area hold Technologies' CEO. that have turned to a wireless technology that enables their More and more car dealerships are turning to technolo- sales people to track and access customer, inventory and gies such as the Internet, Internet telephony and computer pricing information through specially-equipped digital as- software to help them sell cars to consumers more efficiently sistants. and give customers a better buying experience. A dealership salesperson typically must complete forms "There are a lot of technologies out there, everything from in every step of the car-buying process—from finding the a salesperson giving customers his cell phone number to a right model in the inventory to financing. That doesn't in- digital assistant that lets dealership personnel access inven- clude keeping a record of customer appointments or a list of tory remotely," said Chris Denove, a partner with J.D. Power potential customers to follow up with later. and Associates. "The key for dealers is to separate those The system, similar to technology used to create wire- (technologies) that serve an actual customer need from those less computer networks in homes and businesses, speeds up that are just cool." the process and eliminates most of the paperwork. "We didn't have an efficient contact management or cus- tomer follow-up system before," said Jill Bernardi, Toyota DriveChicago.com In Print included of Bloomfield's general sales manager. "Now our sales as- sociates have it at their fingertips." A copy of the second edition of DriveChicago.com Staff and customer feedback has been mostly positive, In Print is included with mailed copies of this Bernardi said. newletter. The publication showcases the inventories "The staff just loves it," she said. "Customers are a little that appear on the Internet sites of DriveChicago unsure about it until we show them what a great tool it is." subscriber dealers. The wireless system, called DealerAdvance, was devel- The March edition will be followed by semimonthly oped by Stronghold Technologies Inc., a mobile technology issues in April, May and June; then culminate with service company based in Hasbrouck Heights, N.J. The com- weekly issues beginning in July. pany has leased its wireless system to 50 dealerships across The publication is offered free at area Shell gas stations, Dominick’s and Jewell groceries, blockbuster Employees want voluntary benefits movie rental stores and Bally Total Fitness locations. Despite having to absorb all costs out of pocket, employ- ees still seek voluntary benefits and increasingly are asking employers to provide a wider array of products and options, The CATA Bulletin is published by the according to MetLife’s Employee Benefits Trend Study. Chicago Automobile Trade Association Some 59 percent of employees are purchasing voluntary 18W200 Butterfield Road benefits, and 61 percent say they are interested in having Oakbrook Terrace, IL 60181-4810 630-495-CATA [2282] phone 630-495-2260 fax their employer offer even more, the study found. The CATA Bulletin is published and mailed every other Friday As more employees face “a triple threat to their financial except during the Chicago Auto Show, when it is not published. security—planning for retirement, saving for a child’s edu- Listings of items for sale are subject to the approval of the cation and caring for an elderly parent—more employees CATA. Candidates for employment must submit a full résumé to the Editor. are appreciating the convenience and value of purchasing Review past editions at http://www.cata.info/ insurance and investment products in the workplace,” said Jerry H. Cizek III President, Publisher Rob Henrikson, MetLife president of insurance and finan- Erik K. Higgins Editor, Director of Dealer Affairs cial services. said Walter McManus of said.

March 31, 2003 CATA Bulletin 3

Safeguards going, so the position must be filled on a permanent basis. In conducting a risk assessment, the dealership must iden- CONTINUED FROM PAGE 1 tify reasonably foreseeable internal and external risks to the formation Security Program to protect its customer infor- security, confidentiality and integrity of customer informa- mation and the information it receives about the customers tion that could result in its unauthorized disclosure or other of other financial institutions. misuse; and assess the sufficiency of whatever safeguards As an example of the latter requirement, a dealer might, are installed to control those risks. in a marketing relationship with his manufacturer’s finan- Security is risked, for instance, by leaving deal jackets in cial arm, obtain information about off-lease customers who unlocked or unattended areas, or by presenting a completed may never have dealt with that dealer previously. Buyer’s Order to a salesperson merely to perform CSI fol- Information Security Programs must contain five ele- low-up. ments: Risk assessment must cover “all relevant areas” of a deal- 1. Designate a Program Coordinator ership operation. At a minimum, special attention must be 2. Conduct a risk assessment paid to 3. Design and implement safeguards to control all identi- • Employee training and management; fied risks • Information systems, including network and software 4. Oversee all the institution’s service providers design, as well as information processing, storage, trans- 5. Periodically reevaluate the institution’s Program mission and disposal; and The Program Coordinator must be an employee of the • Detecting, preventing, responding to attacks and intru- company. All other elements can be contracted with an out- sions on any electronic and non-electronic information sys- side agency, except the overall responsibility for compli- tems, or other systems failures. ance. Also, the coordinator must be senior enough or have Dealers also must oversee their service providers, requir- enough clout to effect change. The coordinator probably ing them by contract to implement and maintain their own would not be subject to increased personal liability. customer information safeguards. Smaller dealerships likely can appoint a single Program The deadline to add such language to service provider Coordinator. Large dealer groups might have to appoint sev- contracts is May 23, 2003, for contracts entered into after eral Program Coordinators, from various departments, and June 24, 2002. A grandfather clause delays the implemen- specify one of them to head a Committee of Coordinators. tation requirement until May 24, 2004, for contracts entered The roles and duties of the Program Coordinator are on- into on or before June 24, 2002. Lawsuits fly, but dealer cleared, in complicated ‘spot’ delivery case Troy Smith bought a Mitsubishi proof of insurance. non-payment and won a default judg- Eclipse from a used-car dealer in One day later, Smith drove two ment. Marion, Iowa. Smith financed the car, friends to a restaurant for dinner, dur- At trial, the court found that since agreeing to put $1,000 down and fill- ing which they all admittedly had sev- Smith had made a down payment and ing out an application for a $9,295 loan. eral drinks. En route home, Smith ac- the dealer had transferred title to the The loan was approved the same day cepted a challenge to see how fast the vehicle, a legitimate sale had occurred. by Arco Financial. Eclipse could go. He lost control of the Importantly, the court also drew a dis- Smith returned to the dealership later car, and one friend died in the accident. tinction between the sale agreement and that day to sign his loan papers. He also Immediately after the accident, Smith’s the finance contract. gave the dealership a postdated check girlfriend stopped payment on her Although Smith was unable to pro- for $500, drawn from his girlfriend’s down payment check. vide all the documentation necessary account. The next day, Smith brought Who got sued? Everybody. Of inter- to complete the financing contract, the $500 in cash to complete the down pay- est is who was held liable. court ruled that action did not void the ment and left in the Eclipse with tem- The injured friend and the dead sales agreement. porary tags and registration papers friend’s estate both sued Smith and the Since the dealership was the only identifying him as owner of the car. dealership, claiming the dealer still party with any money, all the losing However, Smith was not able to get owned the car since all the conditions plaintiffs appealed the ruling. But an insurance on the vehicle, a requirement for ownership had not been fulfilled. appeals court upheld the trial judge, of the installment loan contract. He Arco Financial cancelled its loan com- holding that the dealer was not liable promised to return in two days with mitment. The dealership sued Smith for for any damages. 4 CATA Bulletin March 31, 2003

Mitsubishi to upgrade Normal Congratulations! Mitsubishi Motors Corp. dent Rolf Eckrodt said in a announced plans to spend March 17 statement. Two area Chrysler dealerships are among the 2002 $200 million to expand the The automaker, of which Mopar Masters, a DaimlerChrysler Corporation award capacity of its Normal, Ill., 37 percent is owned by to identify “the best of our best.” Among the 81 Club plant by 25 percent, to allow DaimlerChrysler AG, said it Members are: it to make 300,000 units a was looking for even more • Larry Roesch Chrysler-Jeep, Elmhurst year. ways to boost capacity in • River Front Chrysler-Jeep, North Aurora The expansion, due to be North America, such as by The Hyundai Board of Excellence identified an elite completed in late 2004, is using available production group of U.S. Hyundai dealers for superior perfor- expected to create about 300 facilities at a Daimler- mance in sales and customer satisfaction in 2002: jobs, the company said. Chrysler plant, expanding Silver Level “Our goal is to produce the Illinois plant, or building • Roland Gartner, Gartner Hyundai, Aurora more vehicles in the markets a plant. A decision would be President’s Level where they are sold,” Presi- made by midyear. • Steve Zazove, Howard Hyundai, Elmhurst • Terry Kunes, Terry’s Hyundai, Tinley Park Nissan North America named its 2003 Owner First Mize, Cizek elected to BBB board Award of Excellence winners, for superiority in sales and service. The winning Nissan dealers include: Kevin Mize, president of 98 members, who meet as a • Jay Weinberger, Continental Nissan, Countryside O’Hare Auto Group, was whole on a quarterly basis. • Neil Gerald, Gerald Nissan of North Aurora elected to the board of direc- Board members also serve • Robert Hawkinson, Hawkinson Nissan, Matteson tors of the Chicago Better on one or more of 10 com- • Charles Piano, Orland Park Nissan Business Bureau; and Jerry mittees which gather more • Michael Kors, Southlake Nissan, Merrillville, Ind. Cizek, president of the frequently. Committee as- • William Slevin, Woodfield Nissan, Hoffman CATA, was re-elected to the signments of the new board Estates BBB board, at a March 19 have not been made. Ford Credit named seven area dealerships among meeting of the BBB. Mize and Cizek both were 101 nationwide as 2002 Partners in Quality, for excep- The full BBB board totals elected to three-year terms. tional efforts to ensure customer loyalty and satisfac- tion. The area dealerships are: Campaign ing the other five months. • Art Hill Ford, Merrillville, Ind. Every month this year fea- • Art Hill Lincoln Mercury, Merrillville, Ind. CONTINUED FROM PAGE 1 tures a “sudden impact” se- • Golf Mill Ford, Niles ries, wherein during one day • Metro Ford Sales & Service, Chicago The radio campaign be- near month’s end, all partici- • River Oaks Ford, Calumet City gun three months ago em- pating stations air the • River View Ford, Oswego phasizes that the dealer ser- campaign’s 10-second mes- • Van Drunen Ford Co., Homewood vice departments are conve- sage hourly for 24 hours. • Village Ford Sales, Bolingbrook nient, reasonably priced and The spots air on a variety trustworthy; and they guar- of Chicago stations with var- antee their quality service. ied formats, including WGN The spots also laud the prices Radio 720, WLS Newstalk Marketplace and selection of used ve- 890, seven stations from the Biller Perform all duties of the position, plus help hicles at new-vehicle Infinity Group (WBBM- office manager complete month-end closings. dealerships. AM, WBBM-FM, WCKG- Seventeen years’ dealership experience. UCS, ADP, Paid spots air in 2003 dur- FM, WJMK-FM, WSCR- Reynolds and Reynolds. Carmella Adcock, 773-315- ing the first two weeks of AM, WUSN-FM and 7410. seven months. The stations WXRT-FM), and two sta- Résumé on file at the CATA. used in the campaign tions from Bonneville Inter- complement those paid spots national (WTMX-FM and with no-charge airings dur- WDRV-FM).