National Auto Insurance Company Review

Automobiles have been a part of American society for about a century now and in today’s society, they are an essential part of everyday American lives. Although in big cities, mass transportation systems such as subways, buses and metros have been developed, most average Americans get to and from work through the means of automobiles. It is for this reason that the Federal Government decided to allow each state to design its own automobile insurance laws, so that they could have a say about under which conditions an automobile was to be used within their respective state borders. With the population of the United States growing everyday and more and more people entering this great country, it is imperative that Americans have automobile insurance so they can drive safely and without risk on the roads of this nation.

Nowadays, most people can find an automobile insurance company within a 25 mile radius from their residence. While there are big car insurance companies such as GEICO, Allstate, and others that are trying to get bigger in order to control this sector of the economy; there are some other ones that are unknown nationally and work within their state’s borders. In this article we will only be discussing those “top dogs” in the auto insurance business by looking at their history, what they offer and how they have become well known through the years.

Esurance: Although this company was founded only in 1999 through the Internet, they have progressed much through the years. The company started in four states and it was quickly bought by the White Mountains Insurance Group. Today, Esurance claims to insure about 85% of the nation’s drivers and they are continuing to grow by providing coverage in 28 states. Since they were founded, this company has strived to give customers the best rates in the market with the best coverage. They pride in their customer service techniques and on the fact that their customer service agents are available 24 hours a day, 7 days a week. This insurance is said to be the first one to offer their products entirely online, making it a little easier and convenient for people to get quotes and enroll from the comfort of their own home of office. The company has grown so much that they have expanded to offer not only automobile coverage, but also life, health, homeowner and motorcycle insurance.

GEICO: One of the biggest automobile insurance companies in the United States, GEICO is best known for their little gecko talking in a British accent, or for the caveman commercials that highlight the fact that getting a quote online is “so easy a caveman can do it.” The Government Employees Insurance Company (GEICO) was founded in the 1930’s when the Great Depression was still hitting this great nation. Leo and Lillian Goodwin started the company in the state of Texas because they had a vision of lowering premiums for selected customers. The company became more and more famous around the United States and it was in 1936 that they established operations in Washington D.C. Nowadays, the company is functioning in all the states and its assets have climbed up to a record $21.9 billion. They have an estimated 7 million members, 21,000 associated in 12 major locations nationwide. This incredible growth has been due to three key elements that GEICO focuses on: excellent coverage, low prices and outstanding customer service.

Allstate: With their motto “You are in good hands” this company strives to be the best by giving their customers peace of mind and enriching their quality of life through the excellent management of their risks. The company was founded in 1931 and it only became a public trading company in 1993. Based in Northbrook, Illinois; Allstate is one of the nation’s leading insurers in urban and regional areas and it has offices in all of the states of the nation. They pride in the various numbers of awards they have won through out the years and because they have supported auto and highway safety reforms including seat belts, air bags and teen driver education. A Fortune 100 company with $157.5 billion assets, the Allstate Corporation encompasses more than 70,000 professionals with near 30% minorities and 59% women. The company provides insurance products to an estimate 17 million automobiles and one out of every 9 autos on the road are insured by them

SF Insurance: This Company was founded in 1922 by a retired farmer and insurance salesman by the name of George Jacob Mecherle. He started the company for the sole purpose of lowering automobile insurance premiums for farmers, because he knew they drove way less than the average customer. Today, SF Insurance claims to insure more cars than any other auto insurance company in North America and it is available in all 50 states and in the neighbor country of Canada. In 2006, the company became the first to promote a major film, when they sponsored the Pixar movie CARS and they have extended to life, homeowner and property insurance. The company has over 17,000 agents and 68,000 employers that help over 76 million customers in every single type of insurance imaginable. They are ranked A+ by A.M. Best and they are also 31st in the list of Fortune 500 list of largest companies.

Nationwide: Another “top dog” of automobile insurance in the United States. The company was founded in 1925 by the Ohio Farm Bureau Federation in order to provide excellent low-cost rates for rural drivers in the state and in the span of 80 years Nationwide has been transformed from a small automobile insurance for Ohio farmers to a big company that receives an estimated $157 billion in assets. Nowadays, Nationwide is not only an auto insurance provider; but it offers financial services as well. They are known for excellence in their service simply because their associates have a variety of skills, experiences and backgrounds that make them more compatible to their customers. The company is ranked 104 on the Fortune 500 magazine and has about 36,000 employers. Is also of note to mention that Nationwide ranks as the 6th largest auto insurance company in the United States based on premium ratings as ranked by A.M. Best.

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How to Choose the Right Automobile Accident Lawyer in California

Car accidents, almost anywhere, happen frequently. This does not come as a surprise since we see different types of automobiles in various sizes everyday on the road. From passenger cars to SUVs, to buses and trucks, these vehicles are virtually everywhere.

In spite of taking caution, millions of people still experience car accidents. In fact, over 6 million car wrecks occur every year in America. Even minor car accidents are inevitable.

Since people can never tell if they will encounter a car accident on the road, it would help to be aware of the proper things to do after a crash. It does not hurt to be prepared for unexpected situations like these. People should be vigilant about this matter.

When you get involved in an accident, it is important to determine who the party at fault was. The other party may not be willing to admit that he is liable. He or she may turn the accident against you. Thus, it is necessary that you understand your legal rights and options.

Nonetheless, there is no need to worry. There are a lot of persons you can turn to when you come upon an automobile accident. Among these people are automobile accident lawyers. They won’t be difficult to locate.

In California alone, you can find numerous car crash lawyers. With just a couple of clicks on the internet, you will see various law firms that offer services for car accidents. As simple as that, you can acquire the information you need.

All you have to do is key-in “California automobile accident lawyer”. A number of law firms will appear, together with the names of lawyers, their location, contact numbers, and other useful information. These are free of charge. If you don’t really need to hire an attorney and you just need to look up some information, you can also make these inquiries through the web.

Finding an automobile accident attorney doesn’t have to be strenuous for you. You just need to know how to find the right car crash attorney. Below are guidelines in choosing an automobile accident attorney:

o Choose a lawyer who has fine experience of handling car accident cases

o Choose a lawyer who has expertise on car accident laws

o Choose a lawyer who gives prime importance to collection of evidence

o Choose a lawyer who has successful record of winnings

o Choose a lawyer who has established his reputation and has earned positive feedbacks from previous clients

o Choose a lawyer who has the time and resources to defend your claims

o Choose an aggressive lawyer who can represent your case effectively

o Choose a lawyer who charges for a reasonable amount

Do not settle for mediocre lawyers. Be smart and consult a very proficient one. Taking time to find the right lawyer will pay off afterwards.

An experienced and skilled attorney can help you collect the damages you deserve. If you find yourself a victim of a car accident, contact an automobile accident attorney right away.

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Car Shopping: Ways To Get The Automobile Of Your Respective Ambitions

Are you unclear about yourself when shopping for an automobile? You may feel as if you got conned before. This is why you must not assume that the vehicle salesman can be your buddy. Read on to discover more ideas. Do not permit a salesperson sell you with a vehicle you can’t genuinely afford to pay for. Regularly, people are talked into purchasing a sports car once the salesman shows them how great they search in it. Recognize that a person selling you the vehicle has an interest in commission payment, when they sell a costly vehicle, they get compensated a lot more. Check on the web for deals. Some of the finest bargains are available on the net. Once you have located the right car, you may drive to the dealership providing the motor vehicle or go to your car dealership and have them purchase the car for yourself. Obtain the dearest dependable dealership to save cash on gasoline. Usually do not go auto buying by yourself. Given that they aren’t the one generating the final decision, they could possibly help you avoid an agreement that isn’t the best to suit your needs. They can be anybody from your Mum into a colleague.

Have discussions with all those you understand the things they may possibly know personally. How can they enjoy the autos they own? Do they really really feel they paid out a good cost? Have they heard about some other autos that may be far better? When you would like to buy an automobile, this can be one method of getting some important info to help you get started out. In no way reveal the trade-in, everything you have lower, or what you wish until you have a cost ironed out. All those are items that need to further decrease the very best cost obtained. This should help you get yourself a much better bargain. Don’t consider about getting an auto coming from a car dealership. You could be shocked to discover the vehicle you want is easily offered by a non-public proprietor or tiny great deal. Check out on the internet or perhaps in classifieds to get autos available for purchase in your area. Analyze an auto by renting a similar brand name. Rent the automobile for any Saturday and Sunday to truly discover how the auto pushes. Continue a long road escape to see how the auto appears approximately the misuse. It will help you feel a lot less anxious when selecting the car. When you want to purchase vehicles, you must have a friend together with you that has very little fascination with your car acquire. A great friend can steer you away from producing an emotional or impulsive decision. You must go on a friend with you when shopping to enable them to support. Check with the dealership to let you possess the automobile examined through the technician you possess.

This auto mechanic should be 1 you can rely on. Avoid using the dealer’s mechanic. He or she can provide a wise idea of in which the vehicle holders. Do not purchase a second hand car without doing some investigation. It really is possible to use certain web sites to find out the need for a vehicle. In order to find out of the amount of a vehicle, go ahead and use NADA or Kelly Glowing blue Publication. In the event the dealer attempts to get additional than what these options say, leave. Each and every salesman which you experience could have an alternative individuality. Despite the fact that auto sales representatives are renowned for employing high-pressure strategies, these methods are losing performance. An increasing number of car dealerships now realize that if they do not drive buyers, the customers will probably be happier and can get back to provide them with a lot more business. Tend not to think twice to walk far from an overbearing salesman. You can actually get a more sympathetic salesperson. Mileage and fuel overall economy needs to be important factors when shopping for a fresh vehicle. It can be more expensive to acquire a gasoline efficient auto, but you’ll save more after a while. Consider this when you’re thinking of getting a brand new automobile and think about your financial budget long lasting as well.

Will not search for a dealer just before performing some investigation into it. Make queries to find out if existing customers are satisfied. Also, you can examination this department to determine if these are on his or her video game. Stick to a car dealership that has knowledgeable staff on hand. If you discover out it comes with an advertising and marketing cost inside your car’s price, notify the car dealership to eliminate it. You must not be accountable for that. When they demand, threaten just to walk. They are going to stop you and present in. Be sure you look for discounts ahead of obtaining a motor vehicle. A lot of auto product sales places offer you a rebate to create the selling just a little quicker in the end. Car dealerships that aren’t that ethical may not even tell you about this rebate and get that cash without the need of at any time telling you about it. You don’t have to accept the first offer given to you. Unless you consider you will get a good price you possibly will not be. You should work out. As a result, you need to utilize the techniques specified herein in case you are to achieve genuine good results.

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Mustang Performance Parts – Maximizing Performance

Automobiles are considered as one of the biggest industries of the world, as automobiles are nearly used by every common man. The field of automobiles is very popular yet it is full of competition and it's all about innovation and creativity. Ford Motors have their own name in the field of automobiles and they are known as the king of racing cars in the field of Automobiles.

Mustang is a brand of automobiles which was launched by the Ford Motor Company. In the beginning it was established and based on Ford Falcon, a compact car. The Ford Company started the production of Mustang in March, 1964 at Virginia, USA and launched it in a very big exhibition at New York World fair.

Mustang started producing the pony cars, which become very famous in USA. They gave a very tough competition to their peers, like GM, barracuda and others. Mustang also launched many coupes which were exported by America.

Nowadays, there is a very big name of Ford Mustang due to its performance, as it is one of the most favorite cars of the racers and. All the models of Mustang provide you the opportunity to run your normal car at a very high speed. The performance of Mustang cars is due to their performance parts.

After launching the Mustang new models, Ford Motors also launched many additional products in the market for mustang lovers. It's a common trend to make a car faster than others and these performance components precisely serve this purpose. Modifying your car by adding these parts will give you better performance and good results.

There are many performance accessories to upgrade your car but the important and major parts are as following:

1. Exhaust Pipes
2. Mustang Exhaust
3. Mustang Headers
4. Mustang Intake
5. Mustang Pulley

These five are the main parts which are necessary to upgrade your car. Because all these parts directly affects the performance of your car, so if you want to make your car faster and speedier, then always take care of all these parts.

Mustang is now offering a wide range of functional parts. Each of these parts has their own abilities and each part is necessary in affecting the car's performance. The Ford Mustang Exhausts are very common and are the most favorite parts of the racers. The latest exhausts are very big and have tendency to increase the acceleration and shoot of the car. It also gives a fabulous look to your car.

Mustang Intakes are also very good from the aspect of performance. These intakes have capability to work twice a time more than the ordinary intake. These intakes are exclusively made for the Mustang vehicles and give performance. These intakes have the latest technology which never heats up the engine.

Ford Motors launched several vehicles of Mustang but the vehicles of fifth generation of Mustang had outstanding results. Racing vehicles of mustang from 2005 to 2008 also showed greater results when compared to the older ones because these additional performance enhancing parts were installed in these cars.

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Automobile Accident Litigation: Overturning the Unfavorable Police Report

Introduction: The Police Report is against your client. Now what? Over the last sixteen years of practicing personal injury and automobile accident law, it has been our experience that the quality of traffic accident investigations has steadily declined, leaving many injured people further harmed by a poor or incomplete police report. The reasons are as follows: government budget issues, poor police officer training, and a lack of commitment to performing a complete accident investigation. Certain well meaning police officers are just not qualified to investigate a complicated catastrophic car, truck or pedestrian injury or death case.

If the police report is against your client an insurance adjuster may not want to make a reasonable settlement offer. As a result the case may be difficult to resolve in a positive way for an injured client. A lawsuit may need to be filed and depositions of the witnesses, drivers, and investigating police officers taken to rebut the police report’s conclusion. If the facts can be developed, it is the attorney’s job to show the insurance adjuster, a judge or jury that the police officer got it wrong.

As we unpack the issues involved in overturning the unfavorable police report we will be discussing the following topics:

A. What is a Traffic Collision Report?

B. Who Has Standing to Obtain a Copy of the Traffic Collision Report?

C. Is the Primary Reporting Officer’s Opinion Admissible at Trial?

D. Are the Witness Statements Within a Police Report Admissible at Trial?

E. Proving the Primary Reporting Officer’s Opinion Is Wrong.

A. What is a Traffic Collision Report?

The Traffic Collision Report or CHP 555 is the standard reporting tool for most all police officer traffic investigators in California. It is intended to satisfy the basic data requirement needs of all users of traffic collision information.

The box on page 2 of the CHP 555 identifies the Primary Collision Factor. Primary Collision factor is defined by the CHP as; “PRIMARY COLLISION FACTOR. Select the one element or driving action which in the officer’s opinion, best describes the primary or main cause of the collision. Whenever possible, this should be a Vehicle Code (VC) violation.”

The term Other Associated Factor is defined by the CHP as; “OTHER ASSOCIATED FACTORS(S). When a secondary violation has been determined to have contributed to the collision, write the VC section in the appropriate box.”

B. Who Has Standing to Obtain a Copy of the Traffic Collision Report?

Drivers involved in car accidents are required by statute to file reports with the California Highway Patrol or local police department, Vehicle Code section 20008. People with a “proper interest” can obtain copies of a police report, Vehicle Code section 20012.

The parties involved in the accident or any other persons having a “proper interest” may obtain copies of a police report. This includes persons involved in later accidents at the same location because the reports may disclose highway conditions causing or contributing to their own accident. See, California ex rel. Dept. of Transp. v. Sup.Ct. (Hall), 37 C3d at 855.

C. Is the Primary Reporting Officer’s Opinion Admissible at Trial?

There are two distinctions regarding admissibility. First is the admissibility of the report itself. The second issue is the admissibility of an officer’s ultimate opinion or conclusion. These are both separate and distinct evidentiary issues.

California Vehicle Code section 20013 states, “No such accident report shall be used as evidence in any trial, civil or criminal, arising out of an accident. The rule against admitting police reports into evidence is well established, Fernandez v. Di Salvo Appliance Co, 179 Cal App 2d 240; Summers v. Burdick 191 Cal App 2d 464 at 470. The policy behind Vehicle Code section 20013 is to protect against the danger of the jury giving more weight to the police report’s conclusion simply because of its “official” character. There is a danger that the “official” police report alone may be relied upon to determine the verdict. As a result the contents of a traffic collision report should be excluded. Sherrell v. Kelso 116 Cal App 3d Supp 22 at 31.

However a police officer witness disclosed in conformity with a California Evidence Code section 2034 demand, who also qualifies as an expert witness, with sufficient experience and training, may give an opinion on the factors involved in causing an accident. Hart v. Wielt 4 Cal App 3d 224. In Hart a 13 year veteran of the California Highway Patrol, with extensive training and schooling in accident investigation was allowed to given an opinion on the proper speed given the conditions. The case involved a vehicle which slid out of control while maneuvering a sharp curve on State Highway 32 going towards Chester. Before the officer gave his opinion on speed the trial judge admonished the Jury that it was up to them to make the final determination of a proper speed and also whether or not the CHP officer was qualified as an expert witness.

In the case of Kastner v. Los Angeles Metro. Transit Auth 63 Cal 2d 52, a police officer deemed qualified by reason of his special knowledge, training and experience was allowed to give an opinion on the point of impact between a bus and a pedestrian. The opinion was based almost entirely on a statement given to the officer by the defendant bus driver at the scene. The bus driver testified at trial identical to the statement given to the police officer at the scene. This removed any argument that the officer’s opinion was based on inadmissible hearsay. The Supreme Court in Kastner acknowledged that the trial judge must first determine whether or not the jury is aided by the expert opinion or if the question is within the common experience of an ordinary person, hence and expert’s opinion would not be necessary, see Kastner at page 57.

In summary, the hard copy of the police report itself stays out of evidence. However if the foundation is present for an expert opinion from the police officer, the ultimate opinion in some form may find its way into evidence. But first the offering party must establish the subject of the opinion is sufficiently beyond common experience, the police officer has the appropriate qualifications, and the opinion is based on reliable evidence, see California Evidence Code sections 720 and 801.

D. Are the Witness Statements Within a Police Report Admissible at Trial?

Generally police reports contain statements of plaintiff, defendant, and non-party percipient witnesses. Whether or not these statements are admissible depends on whether or not they are hearsay. California Evidence code section 1200 states, “Hearsay evidence” is evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter stated.”

What is admissible? Most commonly statements in police reports made by the plaintiff or defendant will come into evidence via an established hearsay exception. Admissions from a plaintiff or defendant are the most commonly relied upon hearsay exceptions, Cal. Evidence Code Sections 1220-1227. Also statements of a non-party percipient witness may come into evidence as impeachment if the witnesses’ statement at trial is shown to be inconsistent with a statement given to the police officer, California Evidence Code section 791.

E. Proving the Primary Reporting Officer’s Opinion Is Wrong.

They key establishing a factual showing that the police officer got it wrong is a complete investigation of the foundation of the officer’s opinion. For accidents in congested urban areas it is common for an investigating officer to only speak to the one or two witnesses who are willing to wait around at the scene and talk to the officer. When a witness sees that other people have come forward to volunteer as witnesses, most people simply leave the scene thinking they are not needed.

Some witnesses that are actually spoken to by a police officer are only spoken to for a short period of time, in an abbreviated manner that leaves out critical details of how the witnesses’ attention was drawn to the accident, what they actually saw versus what they think may have happened. The typical police officer statement is a summary of what was said to the officer. An oral witness statement is noted by an officer in his notebook. These notes are then transferred into the typed up police report. The typical police officer procedure for taking and documenting witness statements is much less reliable than a taped audio recording of a witness. It is important to contact witnesses in the police report to determine the accuracy and foundation for the statements attributed to them by a police officer.

How do you find the witnesses who are not identified in the police report? The keys to finding additional witnesses are as follow: post signs in the surrounding area of the scene; return to the area and ask local store owners for the names of anyone they know may have see the event; look for surveillance videos that may have caught the collision itself on video; and secure the computer aided dispatch (CAD) printouts or audio recordings of the people calling in to report the accident via their cell phones. The CAD records will show the phone numbers for all of the people calling into the 911 dispatch system to report the accident. Many of these callers are good percipient witnesses whose names are not in the police report.

Any good accident investigation is not complete without a thorough accident reconstruction. In pedestrian injury cases a good time distance analysis of what the driver should have seen, at what distance from the point of impact, over what time period may be revealing. With known or estimated driving speeds an expert may be able to back up a driver’s field of view (line of sight) and determine if the driver reasonably had enough time to stop prior to the point of impact. It is extremely rare for an investigating police officer to conduct a time distance / sight line analysis, to determine whether or not a reasonable driver should have avoided the collision. A complete accident reconstruction is expensive. Think about whether or not a complete accident reconstruction is feasible given the damages involved in the case.

Conclusion: When confronted with a police report that is against your client remember the following. A police report is just a summary of the facts taken in an abbreviated manner and collected over a short period of time. Often the report is incomplete, misleading and lacking in factual foundation. If you believe in the case; do not stand down just because the police report is against your client. Conduction your own investigation and make your own determination of the extent of any driver negligence.

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Automobile Dealerships – Out of Trust – Keepers

The Necessity of a Keeper

When a lender feels its security is in jeopardy, it frequently places a keeper in the dealership. This action is usually precipitated by the lender losing its "comfort level" with the dealer.

While many dealers interpret the placing of a keeper in their dealership as a hostile action on the part of the lender, their reaction is based more upon emotion than logic. The lending officer works for a corporation and the corporation is owned by shareholders. The officer has a duty to the company and to the shareholders to protect their security.

"The act of (a lender) in placing its representatives at the plant of its debtor reflected only the natural instincts, interest and solicitude of any other creditor then in its position, and (the lender) is not on that account alone to be penalized by being declared the principal. " Commercial Credit Co. v. LA Benson Co., Inc. 184 A. 236, at 240 (Md. 1936).

See too: Cosoff v. Rodman (In re WT Grant Co.) , 699 F.2d 599 (2d Cir.) Cert. denied, at: 104 S.Ct. 89 (1983) where the court said the banks would have been derelict in their duty to their creditors and stockholders if they did not keep a careful watch on the debtor.

The lending officer did not wake up one morning and decide it would be a good idea to put a keeper in the dealership. In the typical case, the dealership had either been experiencing financial difficulties for a period of time, or a series of floor checks revealed the dealer had "sold and unpaid" vehicles of such an unusually high proportion to monthly sales, that the lender classified the vehicles as being sold out of trust. In either situation, a prudent lender must view the dealer from a different perspective.

No one can predict what a person will do under the continued pressure of serious financial difficulties. By the time a lender puts a keeper in a dealership, the burdens the dealer is shouldering have been growing for some time. The dealer usually does not fully comprehend the extent of the strain under which he or she has been functioning; but, when one faces numerous negotiations with creditors, endless days of chasing cash to make payroll and pay bills and does not have enough cash to purchase and keep a good trade, one's judgment becomes clouded. An experienced lender knows that a normally rational person can do most anything when placed under a sufficient amount pressure, for a sufficient amount of time.

When the keeper appears, the dealer rather than being vengeful or hurt should realize the dealership needs professional help and seek it. There are many ways to continue operating a dealership with a keeper and to resolve the situation, re-capitalize the store, or sell the dealership at a fair price, vis-à-vis a fire sale.

In most instances, a keeper is placed in a dealership upon the mutual consent of the dealer and the finance company. At the meeting preceding such an action, it is wise for the parties to identify, agree to and understand the specific duties and corresponding actions, of the keeper.

The Keeper's Affirmative Duties

Although the primary concern of the keeper lies in the care and custody of the floored vehicles, in most instances the lender also holds a security interest in all or part of the dealership's assets. Consequently, the keeper will want to be and should be aware of the dealer's attitude towards assets other than the floored vehicles and should report to the credit company any indication on the part of the dealer to dispose of any such assets.

The keeper, usually more than one person, will be at the dealership every business day from the time the first employee arrives, until the last employee leaves. The keeper should be responsible for:

(1) The condition, location and security of the pledged assets;

(2) Keeping the vehicles':
a. Ignition Keys
b. Dealer License Plates
c. MSOs and / or Invoices and other documentation required to transfer title.

(3) Being present when the mail is opened;

(4) Taking custody of the cash and checks;

(5) Taking custody of the unused check stock;

(6) Supervising preparation of the bank deposit and agreeing upon whom will make the deposit;

(7) The disposition of proceeds on contracts of sold vehicles, to be sure the money gets to the proper parties;

(8) Arranging for third party finance companies, which purchase the dealer's contracts, to include the lender's name on proceeds checks, or, in the alternative, to refuse to permit the dealer to contract a sale to other finance companies;

(9) Being responsible for protecting the vehicles after the dealership closes; if the vehicles cannot be blocked from exiting the facility, via a fence and "blockers", a security guard should be hired;

(10) Establishing a means of maintaining a running, daily, or semi-daily, inventory control of unsold vehicles. Only one vehicle at a time, for which the lender has not received payment, should leave the dealership, whether of not that vehicle is floored;

(11) Being aware of the activities in the Parts Department and its employees.

Courts have approved of lenders controlling the release of the bank's collateral, depositing all accounts receivable in a special banking account and requiring the counter-signature of the bank's agent for all payments from the special account [ Ford v. CE Wilson & Co. Inc. , 120 F.2d 614 (2d Cir. 1942)], receiving regular reports on the accounts payable activity, receiving estimated weekly expense budgets [ Edwards v. Northeastern Bank , 39 NC App. 261, 250 SE 2d 651 (1979)], proffering advice to the dealer, even coupled with a decision to withhold credit [ In re Beverages International, Ltd. , 50 Bankr 273 (D. Mass 1985), requiring the debtor to hire a consultant acceptable to the bank in the management and sale of the company, requiring the debtor to implement a lockbox with respect to its receivables and requiring certain individuals to pledge their stock in the debtor, to the bank [ In re. Technology for Energy Corp , 56 Bankr. 307 (ED Tenn. 1985).

Acts a Keeper Should Not Perform

If the work-out plan ever deteriorates and / or the relationship becomes hostile between the lender and the dealer, or creditors or employees of the dealer, the keeper's will come under the scrutiny of a court. In such a case, those actions could be the beginning of a basis of liability or exoneration for the lender. In order to best protect the lender, the keeper should be aware of the following:

(1) The lender has an affirmative duty not to unnecessarily, maliciously or promiscuously disclose the financial condition of its debtor and any unauthorized disclosure could be a basis for both compensatory and punitive damages. Rubenstein v. South Denver Nat'l Bank , Case No 86CA0840 (Colo. 1988);

(2) Participating in board meetings and exercising decision making authority with respect to the day to day operations of the business could make the lender liable for all of the debts of the debtor. Lurgen, Liability of a Creditor in a Control Relationship With Its Debtor , 67 Marq. Law Review 523 (1984); See too: Restatement (Second) Agency, Section 14-0, Comment "a";

(3) Evidence of personality conflicts with the borrower could support a bad faith claim by the debtor. KMC v. Irving Trust Co. , 757 F.2d 752 (6th Cir. 1985)

(4) Making threats which the lender is not prepared to carry-out, may support a fraud action against the lender. State Nat'l Bank of El Paso v. Farah Manufacturing Co. 678 SW2d 661 (Tex. App. El Paso 1984).

(5) Misleading a lender who intends to refinance the debtor, as to the debtor's financial condition may result in liability to the third party lender. General Motors Acceptance Corporation v Central National Bank of Mattoon , 773 F.2d 771 (7th Cir. 1985).

Note too: while a factory does not seem to owe a duty to protect a lender's floor plan status, to inform the lender of the fact that the dealer is going to sell, there is a triable issue of fact as to whether or not the factory has a duty to disclose the foreseeability of the dealer going out of trust. Beneficial Commercial Corp. v. Murray Glick Datsun, Inc. 601 F.Supp. 770 SDNY 1985).

Procedures for Handling Insurance and Service Contract Monies

Some lenders have experienced staffs, which understand the above issues and problems. In any case, the dealer should be aware of them and should open new trust accounts. The accounts should be opened at a separate bank, in order to avoid any misunderstandings. If the lender wishes to audit these new accounts, that is fair. If a lending officer threatens to penalize the dealer for protecting the customer's money, he or she is being unreasonable and the dealer should ascend the chain of command until reason prevails. If reason does not prevail, the dealer has hard evidence of the lender creating an untenable position, which evidence may prove useful at a later date.

The handling of the premiums for life, accident and health insurance, and for service contracts, does not create a problem, if a routine is established. Always, with respect to insurance premiums, and usually with service contracts, the sale is covered under a security agreement. The lender and dealer should agree that all "time sales" will be restricted to the lender, unless a third party financing company agrees to put the lender's name on the proceeds check, which usually does not happen.

When a time-sale is being arranged, advance approval of the lender is should be required. Subsequently, when the contract is offered to the lender for purchase, the lender should deduct the amount necessary to release the flooring. If the proceeds of sale are insufficient to clear the flooring, the keeper should have already deposited the cash down payment, and / or have taken possession of the title to the trade-in.

The proceeds of sale, in excess of the flooring, are given to the keeper, who supervises the deposit of the service contract and insurance monies to the trust account and the mailing of the premiums companies to the appropriate insurance companies. If possible, the pay-off for the traded vehicle is also made from the general account of the dealership.

The above process, while time consuming, is necessary. The parties should appreciate the understanding, patience and cooperation needed from each other in order to make the operation run smoothly. If either the keeper, or the dealer, has a problem working with the other, the problem should be discussed with the keeper's superior and resolved, or a new keeper assigned.

Procedures for Handling Payroll Monies

With respect to payroll monies, the dealership should continue with separate payroll account and the lender should agree to permit a payroll large enough for sufficient personnel to run the dealership in order to complete whatever stage of the work-out plan the parties have reached. If the dealership is winding-down sufficient payroll should be allowed for a "skeleton crew" to prepare the dealership for sale, or closing. Equipment will have to be guarded and maintained. Secretarial and accounting work will have to be completed. With respect to sales people, although they do fall within the minimum wage laws, they only get paid a commission if they make a sale and, if they do, they probably will have sold the asset for more money than the lender would get at an auction. The source of funds to cover the dealership operations is discussed in the next section.

Commissioned Salespeople

As mentioned, the commissioned salesperson gets paid a commission if and only if a contract for the sale of a vehicle cashes. They represent the best means of obtaining full value for the lender's security. Consequently, the lender, regardless of its security interest, would probably be wise to subordinate its interest to the extent necessary for the sales people to earn a reasonable commission.

Closing a dealership is covered in another article. At this point, it is enough to mention that a lender, liquidating foreclosed vehicles, would have to deduct transportation, insurance, storage and auction fees from the forced liquidation sales prices of any vehicles it sold, before receiving any monies itself. Therefore, the amount of a salesperson's commission for selling vehicles, net of the foreclosure costs, would appear to be a good investment, on the part of the lender.

An interesting question arises as to whether or not the lender has an implied duty, knowing the sales people are liquidating the inventory for the benefit of the lender, to inform the sales people that it, the lender, intends to keep all of the gross profit from the sale; and, further, if the lender, knowing it does not intend to allow the sales people to be reimbursed for their efforts, says nothing, do the sales people have an action against the lender?

In any event, the payment of employees (salaried or commissioned) should be made by the dealer from a separate payroll account. The account should be funded under the supervision of the keeper, but the lender's employees should not participate in distributing the funds. Note: Participation in distributing the company payroll could make the lender liable for taxes. 26 USC 3505 and 6672.

Division of the Discretionary Income

Vehicle Income

If a lender maintains a security interest in the dealer's vehicle inventory and if the dealership has collected and spent money for vehicles which have been sold, without reimbursing the lender for those vehicles, then the dealership's gross profits from all future vehicle sales should be applied to reduce the number of sold and unpaid units. The cash profits from such sales should be applied immediately to the lender's debt, such as vehicle gross profit, finance and insurance commissions and service contract profits. Factory rebate money and incentive monies should be assigned to the lender and applied to the borrower's debt only upon receipt of the actual cash.

Service Department Income

Unless the dealership is averaging a 100% service absorption rate of its fixed overhead expense, which is unlikely, trying to operate a dealership on the service department's income will be difficult, if not impossible. If the lender is unable or unwilling to allow these monies to be applied to the general operating fund of the dealership, it means the lender has decided to close the dealership, whether it believes so or not.

The service department monies include gross profits from parts, service, labor and the body shop, if the dealership has one. The percentage of all fixed overhead expenses covered by this profit reversing the dealership's absorption rate.

If the dealership is being sold or closed, these monies should be used to complete the payrolls necessary to accomplish an orderly transition or liquidation.

As always, consult with a qualified attorney whenever dealing with out of trust situations.

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The US Automotive Industry and The Big Three

We have a proud car culture in the United States but, surprisingly, not many people know too much about this country’s automotive history. For this history lesson, we are focusing on the automotive “industry” rather than the history of the automobile itself.

When It All Began

In the 1890s, the American automotive industry began and, thanks to the use of mass-production and the large size of the domestic market, quickly evolved into the largest automotive industry in the world (though this title would be taken from the U.S. by Japan in the 1980s and then from Japan by China in 2008).

The U.S. motor vehicle industry actually started with hundreds of manufacturers, but by the end of the 1920s, three companies stood apart from the rest:

  1. General Motors
  2. Ford
  3. Chrysler

The Big Three

These three companies continued to prosper, even after the Great Depression and World War II. Henry Ford began building cars back in 1896 and started the Ford-Motor Company in 1903. Ford utilized the first conveyor belt-based assembly line in 1913, improving mass production of its Model T. The assembly line decreased costs significantly and the Model T sold so well that it propelled Ford into the largest automobile company in the U.S.

General Motors was founded by William Durant (formerly a carriage maker)n in 1908. In the first couple of years, GM acquired Buick, Oldsmobile, Oakland (later to become Pontiac), Cadillac, and a number of other car companies. Durant also wanted to acquire Ford but Henry Ford opted to keep his company independent. Having become a little to “acquisition-happy,” Durant over-extended the company and was forced out by a group of banks who took controlling interest in the company. Durant then teamed up with Louis Chevrolet and founded Chevrolet in 1913, which became a quick success. Durant retook majority control in GM after acquiring enough stock and GM acquired Chevrolet in 1917. This did not last long, however. Durant was forced out again in 1921. In the late 1920s, GM overtook Ford as the largest automaker.

The former president of Buick and a former executive of GM, Walter Chrysler took control of the Maxwell Motor Company in 1920, revamped it, and reorganized it into Chrysler Corporation in 1925. Chrysler acquired Dodge Brothers in 1927 and, in 1928, introduced the DeSoto and Plymouth brands thanks to the dealer network and manufacturing facilities that came with the Dodge acquisition. By the 1930s, Chrysler overtook Ford and became the second largest automaker.

1950s and Beyond

By 1950, America produced almost 75 percent of all automobiles in the world. At the start of the 1970s, however, U.S. auto companies (especially the Big Three) were severely affected by increased competition from foreign auto manufacturers and high oil prices. In subsequent years, companies bounced back occasionally but the crisis reached its pinnacle in 2008, prompting Chrysler and General Motors to file for bankruptcy reorganization and be bailed out by the federal government. While Ford was also affected by the crisis, it decided to power through on its own and did not take the bail out. We actually have a lot of respect for Ford as a result of this. They did not take the easy way out.

The year 2014 saw saw the biggest (seasonally adjusted annualized) sales in history with 16.98 million vehicles.

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The Need for Hybrid Cars

Since the very conception of the automobile, engineers and designers have been searching for was to make them more efficient and save on fuel consumption. Petrol fuels the majority of vehicles and diesel fuel is used in heavier automotive equipment. The internal combustion engine is considered to be a major if not the biggest source of environmental pollution and the cost of fuel is increasing every day.

With a constant rise in fuel costs and the environmental concerns regarding automobiles, vehicle engineers have had to develop more economical and environmentally safer alternatives to the internal combustion engine that powers most cars. This has led to the birth of the hybrid automobile. These hybrid automobiles offer a number of benefits. The hybrid automobile is a car that is powered by both an electric motor and a gasoline engine. Compared to non hybrid vehicles, the hybrid car saves on the cost of fuel by being more fuel efficient and has a lower rate of fuel consumption.

Hybrid cars operate on a dual mode where the electric motor, powered by batteries, takes over once the gasoline engine has gotten the vehicle up to speed. Braking and deceleration generates energy that is used to charge the electric motor’s batteries. This system allows the hybrid car to provide better fuel efficiency. This also means that the engine of a hybrid vehicle is shut the moment the car is stopped. Considered the biggest advantage to the hybrid car is the reduction of environmental pollution due to fewer emissions of carbon dioxide and other harmful gases in to our atmosphere. Automobile manufactures such as Honda, Toyota, and Ford have already introduced hybrid car models to the commercial market and several others are in development.

Currently there are two types of hybrid vehicles on the market. The first is the “Series” hybrid. A battery powered electric motor powers the Series hybrid car. It also has a gasoline powered engine but it does not singularly power the vehicle. The gasoline engine powers a generator which is used in turn to charge the batteries of the electric motor. The electric motor is left on during the vehicles entire operation however the gasoline engine can be switched on or off depending on the needs of the vehicle. This type of hybrid automobile provides better mileage in city traffic.

The second type of hybrid vehicle on the market is called the “Parallel” hybrid. The Parallel hybrid car, like the Series type, has a gasoline engine and an electric motor. The electric motor and the electric motor can both be used to turn the transmission and power the vehicle. The major difference between the two types of hybrid cars is that the Parallel hybrid uses its electric motor to boost the vehicles power when required to increase the car’s speed. The Parallel hybrid car is considered better suited for the open highway.

Hybrid automobiles provide several benefits due to some very unique features. The construction of the hybrid vehicle uses more lightweight materials than traditional automobile. This saves energy by using less to propel the hybrid car. Hybrid cars also increase energy efficiency because of their more aerodynamic shapes. Tires used by hybrid vehicles run on a higher pressure and are made of a more rigid material than general car tires. The higher pressure helps to increase the vehicles gas mileage per gallon of gasoline used. The overall efficiency of the vehicle is increased by these tires because they reduce friction on road surfaces and provided a grip. The braking system provided an energy transfer from the electric motor to the vehicles batteries when ever the brakes are applied. The overall gas mileage of a hybrid varies from model to model. The EPA test numbers report that the Lexus RX400h receives 31 MPG in the city and 27 MPG the highway while the Honda Insight receives 61 MPG in the city and 68 MPG on the highway.

In conclusion, the future of automobiles is currently the hybrid car and purchasing a hybrid vehicle will not only save you money but will also allow you to take responsibility and do you part in creating a safer, cleaner and greener environment.

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The Automobile in Melody

Historical events are captured in the music of the era. ‘Over There,’ ‘How ‘Ya Gonna Keep ’em Down on the Farm after They’ve Seen Paree, and ‘When Johnny Comes Marching Home’ were some of the Doughboy songs of World War I. Al Jolson singing ‘Brother, Can You Spare a Dime’, and ‘Dust Bowl Blues’ marked the Great Depression. ‘Fightin Side of Me’ revealed the nation’s conflict over Vietnam in the ’60s. So it is only natural that the automobile, which changed American life forever would be immortalized in song and it was.

At first the automobile was only for the wealthy and this was reflected in early sheet music. Even though there were no lyrics, ‘The Swagger’ and ‘Up Broadway’ featured fashionably dressed urban couples with an automobile. Then came the song ‘The Auto Man’ with the lyrics implying that ownership of an automobile indicated wealth and prestige. But along came Henry Ford who pledged to manufacture an automobile that the man on the street could afford and he kept his promise. In October 1908 the first Model T’s, priced at $850, rolled off the assembly line. Over nineteen years of production, its price would drop to $260. The Model T was referred to as the Tin Lizzie and the Flivver and became the subject of many songs. Lizzie is a nickname for Elizabeth and was a popular name for horses at that time.

So then they sang:

Old Zeke Perkins sold his hogs the other day,

The gosh-darned fool threw his money right away;

Rode into town, sittin on a board,

Came home ridin’ in a brand-new Ford!

However, the roads were still designed for horses and did not easily accommodate the speed of the new tin horse so in 1912 along came the song, “Bump, Bump, Bump in Your Automobile.” While the song lyrics emphasized the poor road conditions, one line inferred that women were attracted to male car owners with the words “Molly May said she loved Willie Green. Best of all she loved Willie’s machine.” This theme was repeated in many of the early automobile songs.

And the poor road conditions often resulted in mechanical breakdowns that popularized the tune, ‘Get Out and Get Under’ with the cover sheet depicting a well dressed man under a cabriolet with his legs extended, wrench in hand and his fashionably dressed lady friend in the passenger seat looking down anxiously. The freedom provided by this new invention also carried over to courting customs allowing more opportunities for intimacy and privacy triggering some social anxiety about the relationships between unmarried couples. This together with the liberation of single women in the Roaring 20’s inspired tunes such as ‘Up and Down the Eight Mile Road,’ 1926.

There were also songs about particular models like ‘Cole 30 Flyer’ with the lyrics ‘You will win me Bill, heart and soul, if you buy a Cole.’ These may well have been early attempts at product-placement advertising. Since Ford was producing most of the automobiles of the era, they were popular song subjects. In 1928 when the Model A was introduced, Walter O’Keefe wrote ‘Henry’s Made a Lady out of Lizzie’. Abner Silver and Jack Meskell followed with ‘Poor Lizzie, what will become of you now that your sister is here.’

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A History of Hybrid Cars

As people become more environmentally conscious, gas prices begin to soar, and independence of foreign oil becomes more of a concern, hybrid cars become more and more popular. A hybrid automobile is defined as a vehicle that uses more than one source of fuel. Many of these vehicles use a combination of a typical gas powered internal combustion engine with an electric motor. While these vehicles were quite rare historically, they have only recently become more popular. Many automobile manufacturers now offer a variety of models that use this technology. While these vehicles still rely on gas, they can greatly reduce the amount of fuel used.

When automobiles were still in their infancy around the turn of the century, there were actually quite a bit of electric powered vehicles on the road. At that point, gas-powered vehicles did not dominate the roads in the way that they do now. Hybrid cars did not develop until about one hundred years later, at the beginning of the 21st century. While the first known model was developed in the 1960s, they did not become available until the end of the 20th century. The very first hybrid vehicle was introduced in 1900. It was initially an electric only vehicle, but a gas-powered engine was added to the automobile soon after, making it the first hybrid automobile.

The idea for this kind of double powered vehicle reemerged multiple times over the following decade. These electric and gas powered cars are well known for their better fuel efficiency and their ability to prevent environmentally friendly driving. These vehicles are built much in the same way as conventional gas powered automobiles, but the battery is much more prominent. These batteries are rechargeable, and they are used to power the electric engines that are installed into these vehicles.

While they do still rely on fuel to run, hybrid cars are certainly a step in the right direction. Since electric motors do not use any energy and typically only operate at slower speeds, this can greatly reduce your use of gasoline, particularly if you are only driving below 40 miles per hour. The battery also charges while the car is running, meaning you don’t have to worry about doing any charging yourself. While these vehicles can be a bit expensive, the prices are getting more affordable. Plus, you may be eligible for a tax incentive, and you may find that your savings in gas money will make the investment worth the cost.

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