From The Chairman’s Perspective Upcoming Annual Meeting for PDAC

The Powersports Dealers Association of Colorado will hold its annual membership meeting on August 20th at 10 am. The meeting will be held in the Clubhouse at Fay Myers Motorcycle World in Greenwood Village and is open to all current PDAC members and any Colorado powersports dealers who might be interested in joining the organization. At this meeting we make sure all attendees are fully informed about the overall strategy and tactical planning of the PDAC board of directors.

I would like to encourage you to attend this meeting. As you can see elsewhere in this newsletter, the association’s past successes in passing and influencing legislation have proved a boon for quality powersports dealers across the state of Colorado. The challenges and opportunities PDAC faces in the next few years will also undoubtedly affect the entire powersports industry, retailers as well as customers, and every dealer in the state should play a part in determining what stand the association takes on the proposed laws and regulations that will impact the operation of their businesses.

PDAC has established itself as an effective advocate for powersports retailers in the state’s legislative and regulatory arenas. The cost of membership provides a high value when considering the quality and focus of our association’s efforts to make an impact on the laws and rules that will either help or hurt our retailing efforts for years to come.

Upcoming issues like possible changes to the franchise laws (which now include dirt bikes, ATVs, snowmobiles and personal watercraft, thanks to PDAC) and the possibility of titling and licensing off road vehicles will have long-lasting impacts on the retail powersports industry and we’d like to have every dealer in the state involved. If you’re not already involved, start by attending the annual meeting this August. And bring a dealer friend who doesn’t yet belong with you!

Kurt Finley



Final Legislative Report for 2008
From the desk of Jerry Abboud Executive Director

The 2008 legislative session was a busy one with insurance, motor vehicle and land use bills in abundance. The following shows legislation relative to our industry, the effects of the legislation, PDAC’s activities and the final disposition of the proposed legislation.


Insurance

SB-11 This legislation provides for personal injury protection for motor vehicles. PDAC worked extensively on this legislation to obtain an exemption for street bikes as the cost of this coverage is astronomical. The bill was amended as needed and signed by the Governor with the street bike exemption on 06/05/08

SB-211 and HB-100 Both bills provided for either emergency medical coverage or personal injury protection for all motor vehicles. Similar to SB-11 and run simultaneously with it, PDAC also amended the industry out of both bills. All 3 bills were in play until the last few weeks of the session at which point they were postponed indefinitely and SB-11 was passed.


Motor Vehicle

SB-244 This was a last minute attempt at major highway funding adding a personal property tax surcharge to all motor vehicles including trailers with an additional $25 registration increase. PDAC opposed this bill, as did many other interests except, of course, contractors, bridge builders, road construction suppliers, chambers of commerce, and concrete companies. The bill was postponed indefinitely. Some form of this type of legislation will return in 2009.

HB-1050 Prior to this legislation an individual wishing to operate a trike could only obtain a 2 wheel motorcycle license to legally operate the vehicle. This legislation provides for a new class of license for trikes where an individual can actually use a 3 wheeler to obtain that specific endorsement. Many people, who would not normally be able to ride a two-wheel vehicle, can ride a trike. However, the bill in its original form was drafted so as to change the entire criteria for obtaining a motorcycle endorsement. This drafting oversight could have resulted in a complete change to how a motorcycle endorsement is obtained. This error was corrected by PDAC and the bill is now law.

HB-1136 This bill is law. The background of this bill begins with SB07-070 that required the CO Bureau of Investigation to establish an internet-accessible verification for use by motor vehicle dealers, recyclers, automobile repair shops, licensed tow operators, and the public, the Colorado Motor Vehicle Verification System (CMVVS). The CBI is only required to establish and maintain a means for public access to the CMVVS, not to track stolen vehicles. A motor vehicle's vehicle identification number is used to determine whether a vehicle has been stolen. While the information that this system would provide is currently available to law enforcement, the CMVVS is not yet in operation. The CMVVS is administered by the Statewide Internet Portal Authority. The bill repeals current law requiring the Department of Revenue (DOR) to suspend a vehicle registration based upon the filing of an affidavit of theft by the owner of the stolen vehicle as of July 1, 2009. It requires the DOR and the county clerks, when a person applies to register or title a motor vehicle, to electronically verify that a motor vehicle has not been reported stolen with the Department of Public Safety. The requirement takes effect July 1, 2009. It is assumed that verification will be performed by using the Colorado Motor Vehicle Verification System. It also requires the DOR to establish procedures to notify local law enforcement if someone attempts to register a stolen vehicle. The bill includes the following provisions:

  • prohibits the DOR or the counties from registering a stolen vehicle until the rightful owner recovers it; and

  • exempts the DOR or county clerks from paying a fee to access the verification system
  • Note: Please contact your county clerk on the availability of this system.

    SB-151 This bill, now law, requires training for those seeking to become used motor vehicle or powersports dealers. It does not apply to existing or new vehicle dealers. PDAC supported this bill as the need to train used dealers entering the market on the law and regulations, particularly for powersports products, is much needed.

    SB-60 PDAC supported this bill as it reauthorizes the Automobile Theft Prevention Authority. This entity has been shown to have reduced the theft of all motor vehicles and thereby, one hopes the overall cost of insuring motorcycles.

    SB-144 Creates a new definition of abandoned motor vehicle at a vehicle repair shop and a new procedure for obtaining title. I am providing a link to the new legislation for dealers to review. The process has changes from the old abandoned vehicle law that was repealed by this legislation. While not complicated, it does have a few hoops for the repair shop to jump through in order to obtain the title just like the old law. As an example, a motor vehicle that has been inspected by law enforcement is not allowed a title application if the inspection is more than a year old. It does not, however, preclude a follow-up inspection. As time allows we will be providing more specifics on this legislation.

    Click here for more information.


    Land Use

    HB-1069 This has been extensively covered, however, it provides for state enforcement of federal motorized travel management on a year-round basis. I have written an article for further review that can be found further below in this newsletter or at the COHVCO website.

    SB-63 This bill, now law, will employ the 96db(A) stationary test for OHVs (99db(A) if manufactured before 01/01/98) and the stationary test for snowmobiles, J2567. Excessive noise is a huge problem that we deal with regularly. This law can help reduce excessive noise and provide a standard that is enforceable as opposed to one that may outlaw use of the vehicles on a county by county basis. Being a state law it supersedes county ordinances. The enforcement date is January 2010 giving those with excessively loud bikes and ATVs time to comply. Everything currently manufactured meets this new state law; ATVS, dirt bikes and snowmobiles. Closed course competition vehicles are not subject to the law unless used on public lands(just like spark arrestors). Dealers are not responsible for sound testing used vehicles.





    What’s Ahead for 2008/2009
    Jerry Abboud Executive Director

    The PDAC Board of Directors has laid out an extensive list of topics for review and possible action over the next 12 months including action at the Capitol. All are aimed at improving profitability, establishing working relationships and improving the relationship between dealers and manufacturers. Briefly the topics include:

  • Adjusting GAP rates for motorcycles and Power sports products to return this product to reasonable availability to protect the consumer and realize a reasonable profit. The GAP issues are rather straight foreword; raise the limits and registrations and sales tax rebates are still in the abstract phase so the remainder of the discussion will be devoted to some of the suggested changes to current.
  • Evaluate the positives and negatives of OHV titles and even registration due to Arizona, Utah and Wyoming allowing licensing of OHVs and whether legislation is feasible.
  • Explore the possibility of a sales tax rebate for high mileage vehicles like motorcycles and scooters to encourage fuel savings and help stimulate the market.
  • Legislative changes to the Colorado Motor Vehicle and Powersports franchise legislation.
  • PDAC will be sponsoring an ATV ride as a legislative fund raiser for key legislators (yes, it should be a better draw than your run of the mill golf tournament).
  • POSSIBLE REVISIONS TO THE FRANCHISE ACT
    1.Warranty Audits and Sales Incentives: Audits/charge backs are currently 3 years for the manufacturer vs. 90 days for dealers. As seen in most states as usual and customary, we propose a 12 month timeframe for both.

    2.Exclusive Facilities and dualing of franchises: Modify confinement requirements by manufacturers for exclusive facilities. Add language to add a franchise without regard to existing franchise agreements. Add language to address reasonable requirements of facility.

    3.Termination and Market Withdrawal: Add language to require a manufacturer who enforces an involuntary market withdrawal to include payment of FMV of franchise to the dealer. In NJ, termination occurs and dealers are paid FMV which avoids litigation costs.

    4.Reasonable Performance Standards: Add language to prohibit pricing variances based on facilities upgrade or sales volume. Formulas to be disclosed and reasonable.

     

    5.Buy/Sell/Transfer/change of management/relocation: Manufacturer to respond in 30-60 days for overall approval or denial on dealer location. Relocation to be approved or denied within 30 days by manufacturer. Manufacturer must respond in 30 days to approve or deny changes in executive management. 6.Prohibit manufacturer’s right of refusal or require manufacturer to pay any "unwind" fees incurred by prospective qualified purchaser for money spent pursuing the sale within a specified timeframe.

     

    7.Prohibit manufacturers from making site control a requirement for approval of a proposed transfer of a dealership, acquisition of dealership, relocation of dealership or renewal of sales and service agreement.

    8.Prohibition on Mandatory Arbitration: Prohibit manufacturers to force arbitration onto dealer by utilizing side agreement outside of the sales and service agreement.

    9.Material change to Dealer Agreement: Allow dealers to challenge their AOR. (logistics due to mountainous area in Colorado).

    Please send in your questions or suggestions on any topic of relevance. Since the Franchise changes are being discussed by the Auto Dealers Association some of the above may not be as relevant to the MC/Powersports Industry. Please be aware the PDAC Board is examining other dealer issues for inclusion.



    What HB1069 is and What it is Not
    By Jerry Abboud

    COHVCO has received a variety of comments both supporting and opposing this legislation that allows Colorado Peace Officers to enforce federal travel management plans. We are speaking primarily of Division of Wildlife and State parks field officers adding an additional law enforcement presence in the field. Let’s clarify a few key points:

  • COHVCO did not originate this bill. The Wildlife Commission and sportsmen’s groups concerned about conflicts among hunters using ATVs and those that don’t and certain resource and habitat impacts identified the bill sponsors and prepared the bill.

  • COHVCO was asked to participate after DOW had decided to go forward, meaning COHVCO was in a position to follow one of two options; refuse to support a very dangerously written bill or join the process to fight to make it reasonable and fair.

  • With DOW, Parks, BLM, Forest Service, Counties, environmental and sports men’s groups pushing hard the question was simply if we could not kill a bill with overwhelming support what impact would it have on our members? The answer is simple, in it’s original form it was more restrictive than the federal Travel Management Rule.

  • COHVCO, after looking at the political composition of the legislature and the governor’s office, in addition to the large number of groups signed up to support the bill, none of whom supported a reasonable alternative the decision was made to join the group and get the bill rewritten. A difficult decision at best, but the job of COHVCO is to make hard decisions and we will not back away from that responsibility.

  • COHVCO worked with the groups and the sponsors throughout the process fighting for every inch and ultimately getting the bill amended into a reasonable piece of legislation.

  • Yes, we know that many of our members are angry with the implementation of the Travel Management Plan and COHVCO is fighting everyday to improve the conditions and process of implementation, so we share your frustration on that point. But as members you will hopefully gain greater insight if you know what the bill contains after the COHVCO amendments.

  • We are getting a black eye from hunting season, particularly violations of designated routes by out-of-state hunters. This bill carries license points for violations while hunting fishing and trapping, to that extent it addresses a real issue.

  • Non-hunting violations are fines ranging from $100 to $200 in a Wilderness area. Tickets are issued, no court appearance unless you want one.

  • Enforcement is incidental meaning the DOW will not add any resources, people or otherwise, they will enforce this in conjunction with their primary responsibilities. Summer enforcement will be much less focused.

  • The notice requirement to write a ticket is addressed in the legislative intent identifying route markers as needed for adequate public notice. This is a requirement that is more than the Travel Management Rule requires as it solely relies on maps.(MVUMs) Actual language from the bill that acknowledges the federal process and admonishes judicious application by state peace officers:

  • "substantial discretion will be required in carrying out that enforcement due to the fact that the new federal policy will most likely take some time to fully implement and should involve the installation of route markers on roads and trails;



  • The Division of Wildlife is required to file and annual report with the House and Senate Agricultural Committees which the public may review to determine if there are enforcement abuses taking place.

  • The bill does not impact or change any existing right of access.

  • The bill, if signed into law, is automatically repealed in 5 years.



  • Remember When?
    By: Steve Zarwell
    Dealernews

    REMEMBER WHEN? Dealers have been using this phrase over and over when speaking with me about fourth quarter 2007. With little warning, unit sales have slowed down even faster than they did during previous challenging years.

    Remember when your sales floors were busy? The phones ringing off the hook all day? When your Web site had hundreds of hits per day? These are the recent memories that many dealers have shared.

    But they are just memories, at least for many of us. Think about how your sales policies changed during those good times, then readjust them for the slow market. After talking with dozens of dealers during the past few months, I have noticed some patterns. Listed below are some interesting statistics based on my own estimations. Share them with your sales staff. Also, don't forget your other profit centers. Service, parts, apparel and the business office are an integral part of a store's success. Have your sales manager start with these statistics when he or she creates policies for 2008. In fact, he or she should refer to them every day.

  • 85 percent of our customers made a buying decision before they even left their homes. Think about that: The vast majority of customers who walked in were there to buy.

  • 72 percent of customers who walked onto the sales floor would say they're "just looking" after a staff member delivered the banal greeting "How can I help you?" Don't hesitate to ban that phrase in all departments starting Jan. 1, 2008.

  • Within four hours of leaving the dealership, 38 percent of people bought products not directly related to the powersports industry (such as RVs, fishing boats and tent trailers). The end result is that those people didn't spend money in our industry.

  • 85 percent of our customers stated that the salesperson did not develop any rapport, nor did he or she ask questions to define the customer's needs and wants. Instead, the sales rep tried to sell them a unit completely different than what they wanted — like a wrong color or last year's model.

  • 88 percent of customers said that the dealer's presentation and sales process were not good. Remember when your store first opened and every contact with the customer was as good as gold? That's the way it should have stayed. Tell your salespeople to give each presentation as if it were the only chance they'll ever get with that customer.

  • 50 percent of customers stated that if they had received an honest, sincere presentation from the salesperson, they would have bought something. During the past years of rabid growth, has your staff learned to take the sales presentation for granted? They no longer have this option in the challenging days, weeks and months ahead.

  • More than 90 percent of customers who did not buy anything during their visit to the store were never contacted after they left the dealership. Right now, I am working in a store where the sales manager personally calls all leads and customers who have visited. The store also has put together a questionnaire used by everyone in the store to follow up on calls and e-mails. Since the implementation of this follow-up process, the closing ratio is 16 percent. Not only are more units being sold, the additional business has generated sales in the store's other profit centers.

  • 82 percent of customers could not remember their salesperson's name months after their purchase. Let's think about that: Your dealership's main representative for customers is the salesperson who sold them a vehicle. Might that relationship be a big, ongoing priority? You bet. Salespeople should have their pictures on their business cards, their thank-you notes and any other stationery.



  • Board of Directors
    Chairman, Kurt Finley - Colorado Powersports
    Vice-Chairman/Treasurer, Jason White - Fay Myers Motorcycle World
    Director, Donavan Facey - Xtreme Performance
    Director, Dave Burke/Duane Akiyama - Sun Enterprises
    Director, Bill Comegys - Grand Prix Motorsports
    Director, Brian Harris - Fort Collins Motorsports
    Director, Jack Starr - RPM Motorsports
    Director, Gary Wilkerson - Handlebar Cycle
    Director, Mike Hendry - Foothills BMW/Triumph
    Director, Steve Larsen - Greeley H-D, Honda, Yamaha
    Director, Marshall Van Thorne - Interstate Honda

    Executive Director, Jerry Abboud
    Members
    All Sports Honda
    Alpine Motorsports
    Apex Motorsports
    Aurora Honda
    Colorado Powersports
    Coyote Motorsports
    Davis Service Center
    Fay Meyers Motorcycle World
    Foothills BMW/Triumph
    Fort Collins Motorsports
    G-Force Powersports
    Grand Junction HD
    Grand Prix Motorsports
    Handlebar Cycle
    Hi Country Motorsports
    Interstate Honda

    Motoadventure
    Motorcycle Accessories
    Rocky Mountain Kawasaki
    RPM Motorsports
    Sun Enterprises
    Sun Sports Unlimited
    Vickery Motorsports
    Wild West Motorsports
    Xtreme Performance Center
    Associates:
    Zurich
    Tucker Rocky Dist
    PSN
    Western Powersports

    Disclaimer: PDAC is not authorized to dispense legal advice. The information contained in this newsletter is for informational purposes only. PDAC advises that dealers consult legal counsel on the specifics of any law or regulation to ensure full compliance.