30 South Meridian Street, Suite 300

Indianapolis, Indiana 46204-2759

Telephone: (317) 232-3955

Facsimile: (317) 232-7655

Web Site:



October 6,2017


Indiana registered automobile dealers ("Registrants")


Ryan E Black, Deputy Director, Consumer Credit Division


Lease-Here, Pay-Here business model for used motor vehicles

This Advisory Letter is being issued by the Consumer Credit Division of the Indiana Department of Financial

Institutions ("the Department"). Certain examination findings and trends have raised concerns that Registrants

subject to Indiana's Uniform Consumer Credit Code ("IUCCC") providing financing for the sale of motor vehicles

may be engaging in disguised credit sales, either knowingly or unknowingly, by utilizing a Lease-Here, Pay-Here

("LHPH") business model for used motor vehicles. All comments outlined in this Advisory Letter pertain only to

transactions for a personal, family, or household purpose.1


A long-standing practice of many used automobile dealers, and some new automobile dealers includes engaging in

consumer credit sales2 that are retained in-house, commonly known as Buy-Here, Pay-Here ("BHPH")transactions.

In the typical BHPH transaction, a consumer enters into a retail installment contract with a Registrant whereby the

consumer is obligated to make more than four payments or to pay a finance charge in order to pay for the purchase

of the vehicle over time. Such transactions are subject to the IUCCC, specifically Ind. Code §24-4.5-2. Significant

provisions that a creditor must comply with include but are not limited to: maximum rate of finance charge (or

credit service charge)3; permitted additional charges4; delinquency charges5; rebate upon prepayment of a

precomputed transaction6; and restrictions on deficiency judgments in consumer credit sales7.

During recent routine examinations of Registrants, the Department has observed an increased prevalence of a

business model where the transactions are structured as leases. In these transactions, a consumer does not obtain

ownership of the motor vehicle at consummation. Rather, the seller/creditor retains ownership of the vehicle until

such time that the consumer exercises either an early purchase option or end of term purchase option, if provided

for in the contract.

1The IUCCC does not apply to transactions for a purpose other than a personal, family, or household purpose; extensions of

credit primarily for a business, a commercial, or an agricultural purpose are exempt. See Ind. Code §24-4.5-1 -202(b).

2Ind. Code §24-4.5-1-301.5(8)

3 Ind. Code §24-4.5-2-201

4 Ind. Code §24-4.5-2-202

5 Ind. Code §24-4.5-2-203.5

6 Ind. Code §24-4.5-2-210

7Ind. Code §24-4.5-5-103

BMV 1-1-17 Changes SOS Dealer Division*

Operating Prior to Registration Time Increased

On 1-1-17 the length of time one can drive a newly purchased vehicle on Indiana roadways without registering the vehicle is increased from 30 to 45 days. Details are below.

For not more than 45 days after the date on which the person acquires the vehicle, a person who purchases a vehicle may display on the newly acquired vehicle a valid and unexpired license plate transferred from another vehicle that the person disposes of by sale or other means. While operating the newly acquired vehicle, the person must have in their possession a manufacturer’s certificate of origin, certificate of title, or a bill of sale.For not more than 45 days after the date on which the person acquires the vehicle from a licensed dealer, the person may display on the newly acquired vehicle a valid and unexpired temporary license plate that was issued by the licensed dealer. The law differs when a vehicle is purchased from a private citizen instead of a dealership.

  • A person who purchases a vehicle from a non-dealer may operate the vehicle for not more than 72 hours after the date of acquisition, but only for the sole purpose of transporting the vehicle by the most direct route from the place of acquisition to:

  • A place of storage, including the person’s residence or place of business;

  • An inspection station for purposes of emissions testing; or a BMV license branch or full or partial service provider to register the vehicle.While operating the vehicle, the person must have in their possession a certificate of title indicating that the person owns the vehicle.

Administrative Penalty for Registrations

As of 1-1-17 the Delinquent Fee will now be called Administrative Penalty. This applies to registering vehicles, off-road vehicles (ORV) and snowmobiles. The amount of the Administrative Penalty is changing. Indiana residents will be assessed an administrative penalty when registering a vehicle, ORV, or snowmobile more than 45 days after the date of purchase/acquisition. Non-residents of Indiana will be assessed an Administrative Penalty when registering a vehicle, ORV or snowmobile more than 60 days after becoming an Indiana resident. Administrative Penalty rules related to titles were effective on 7-1-16.

*(Note: All above information is provided for overview purposes only and is not a substitute for Indiana Motor Vehicle Laws. For details refer to Indiana Code-Title 9.)




The Indiana Independent Automobile Dealers Association (IIADA) understood our member’s inability to provide customers with their title in 21 days and are pleased to announce that the law has changed!

The types and geographic locations of lenders, the geography of our customer base, mail delivery, and title processing have changed.  These changes are the reason we educated and worked with our Legislature to make delivery of title time requirements more reflective of business conditions.

CUSTOMER FINANCING has become specialized with sub-prime financing making up the majority of the financing market. These companies along with credit unions, state and nationally chartered banks have given us the ability to meet the needs of our individual customers.  However, the physical location of lenders can be most anywhere making it increasing difficult to get titles.  This is in contrast to times when the majority of lending was underwritten by a local bank or credit union, who held the title in their safe, all located down the street from the dealership.

INTERNET PRESENCE is now as important as physical location to most dealers.  Today’s customers are shopping your inventory online from other states and countries.  Buying habits have changed from the times when the majority of vehicle sales came from a customer driving by the dealership to see your inventory or seeing an ad in the local paper.  The logistics of delivering a title to a customer many states away increases the time needed to get the title to the customer.

CONSUMER PROTECTION remains in place.  The safeguards that protect a consumer purchasing a vehicle in Indiana include:

       *Indirect Retail Lenders – Lenders are continuously monitoring their dealers to make sure they are compliant and solvent.Floor Plan Inspections – Dealers who borrow money to finance their inventory are subject to regular inspection by their floor plan lenders. 

  • Dealer Inspections – Dealers are subject to inspections by the Dealer Services Division under the Indiana Secretary of State Office. 


  • Consumer Complaints – A bad “online review” can do a lot of damage to a dealer and his reputation. Indiana’s Attorney General investigates customer complaints against Indiana dealers.


  •  Dealer Bonds – Dealers must maintain a $ 25,000 to ensure clear title.


    WORKING TOGETHER we were able to get this legislation written and passed.  Fritz Kreutzinger, IIADA Legislative Chairman, laid much of the ground work for this legislation through the Motor Vehicle Advisory Board meetings with the Indiana Secretary of State. THANK YOU to the legislators who listened and heard our concerns.





Good News for Small Business - Tax Udate

by: Jane Saxon, CPA with Somerset CPAs and Advisors


The IRS raised the "safe harbor" threshold from $500 to $2,500 for expensing certain capital items that would have previously required capitalization and depreciation.  Although the $2,500 threshold takes effect for the 2016 tax year, the IRS has indicated they will provide audit protection by not challenging the use of the $2,500 threshold in tax years prior to 2016.  This can be interpreted to mean businesses may use $2,500 in the preparation of their 2015 tax returns.   

This is great news for small business owners.  As a result of this change, a small business may now immediately deduct expenditures up to $2,500 that previously would have been spread over a several year period.  Common examples of such capital expenditures are notebooks, tablets, desktop computers, office equipment, office furniture, shop equipment and small tools. 

One thing to be aware of with this change is that although the IRS is not requiring capitalization of assets under $2,500; these assets are still considered personal property by the local taxing authorities and will still be subject to tangible personal property tax.   Business owners will need to develop a method of maintaining a listing of these assets for PPT reporting.


Somerset’s Dealership Team stays abreast of all changes impacting business owners. We believe a CPA should be proactive, not reactive.  Contact a member of Somerset's Dealership Team today to discuss how we can partner with you!

 Reach us by email at, or give us a call at 317-472-2183.

Dealer Alert

For all applications for an initial license (other than a wholesale license) in 2015, please submit your application without the fee.  After receiving your application, the Auto Dealer Services Division will send to you an invoice reflecting the prorated fee amount prior to processing your application.  The Auto Dealer Services Division must receive payment to complete the processing of your application. (Indiana Code § 9-32-11-12(d))
If you have any questions, please contact the Auto Dealer Services Division at 317-234-7190.


Motor Driven Cycles (MDC), Motor Scooters, Mopeds and Motorcycles

As of January 1, 2015, new laws went into effect regarding the licensing and registration of Motor Driven Cycles (MDC), previously referred to as motor scooter, mopeds and motorized bicycles. Licensing and registration requirements for MDCs can be found at the Bureau of Motor Vehicles website:

Dealers of Motorcycles or MDCs who sell at least twelve (12) units per year are required to obtain a dealer license from the Indiana Secretary of State Dealer Services Division. Information regarding dealer licensing can be found at:

MDC dealers who sell units under 50cc can elect to become a licensed dealer.

Licensed motorcycle dealers can purchase interim motorcycle plates and request MDC-A or MDC-B decals from the Dealer Services Division, which will allow their properly licensed customers to operate their MDC prior to  registering it with the Bureau of Motor Vehicles.  To request MDC-A or MDC-B decals, please contact the Auto Dealer Services Division at 317-234-7190 or



New Motor Vehicle Dealer Rules

Effective July 1, 2014 dealers will charge sales tax at the buyer’s home state rate. This new law provides that the seller of a motor vehicle to a buyer who intends to transport and register the vehicle outside Indiana within 30 days of the sale will collect sales tax at the rate the purchaser would have paid in the state where the vehicle will be registered. The out-of-state sales tax rate charged is to include only the state sales tax, NOT any local County, or Jurisdictional sales taxes.  All sales taxes collected will be remitted to the Indiana Department of Revenue.

Beginning with the July 2014 tax period, motor vehicle dealers should no longer use the current ST-103 return. A new Indiana sales tax return, ST-103CAR, has been developed specifically for motor vehicle retailers. You should begin using this return, either through INtax or another approved filing method, beginning with the July 2014 tax period. To update your return template to the ST-103CAR form, contact the Indiana Department of Revenue via the INtax message center, mail, or fax to (317) 232-1021.

For each of these sales, you must complete and retain Form ST-108NR . Also, you must provide a copy to the buyer as evidence of the amount of sales tax collected. Form ST-108NR can be found online at

The following table lists various state tax rates


Sales Tax Rate




0% (no sales tax currently imposed)












0% (no sales tax currently imposed)




































0% (no sales tax currently imposed)





New Hampshire

0% (no sales tax currently imposed)

New Jersey


New Mexico


New York


North Carolina


North Dakota







0% (no sales tax currently imposed)



Rhode Island


South Carolina


South Dakota














West Virginia






District of Columbia



The Indiana Independent Automobile Dealers Association proudly presented Life Time Achievement Awards to Kim Graham, owner of Kim Graham Motors, Fritz Kreutzinger, owner of Fritz Associates, and  Ed White, owner of White’s Auto Sales. Each of these men have been Indiana State Quality Dealers and have served as the Association’s President.  The Life Time Achievement Award was presented for their leadership and dedication over the past 25 years and in grateful appreciation and recognition of their commitment of excellence to the automotive industry and dealers of the association.

Indiana’s Andersen named Executive of the Year

Debbie Andersen, executive director of the Indiana Independent Automobile Dealers Association, was selected by her peers as NIADA’s 2012 Association Executive of the Year.

Andersen, has headed the IIADA since 2001 after serving six years as the association’s accountant, and has used her background as a CPA to put IIADA in a strong financial position.

"The association was going through hard economic times," said 2011 Executive of the Year Jim Mitchell of Ohio, who presented the award to Andersen during the 66th Annual NIADA Convention & Expo at Caesars Palace in Las Vegas.

"But today it is on solid financial ground and the association’s membership has grown to its highest level."

The winner is chosen by the executives of the state independent auto dealers associations nationwide.

"I’m very honored," Andersen said, "because it’s a selection by my peers, and to be honored by your peers, I think, is the ultimate in respect."

When Andersen took on the executive director job, she knew from her stint as IIADA’s accountant that getting association’s financial house in order would be her first order of business.

"I knew I was getting into a big financial mess," she said. "That’s why I was brought in to be the CPA in the first place. They were very financially challenged. When the executive director resigned, I thought, ‘Yeah, I’d kind of like to do that.’ And I truly enjoy it."

Andersen cut the association’s expenses and began using fundraising events to increase revenue without raising the members’ dues.

"We cut expenses immediately, and you look for other sources of income," she said. "It sounds simple, but we had to be creative. We had to think outside the box. Dues was not the place to go. We needed to raise money but we didn’t want to do it on the backs of the dealers. And, of course, we also slashed expenses. I didn’t spend if they didn’t have it."

Growing up in the Detroit area, Andersen has been around the car business and car people her entire life. While attending Northern Michigan University, she worked on the assembly line for Federal Mogul, a major parts supplier to auto manufacturers.

"I worked my way through college working in automotive factories," she said. "We made all the plastic parts, like the dash, on injection molding machines. They came off the assembly line and you had to trim all the plastic off of them."

Andersen said the biggest step she has seen IIADA take during her tenure has been in its relationship with the state government.

"We have grown tremendously in recognition within the state government<" she said. "Our state officials, from the governor to the secretary of state to the director of the bureau of motor vehicles, all look to the association now for advice and suggestions, which was not the case when I came on board 11 years ago.

"That is huge. That’s probably the thing I’m most proud of."

NEWS RELEASE                                                                                                                                                                                                                             Secretary of State Connie Lawson Announces New Security Measures

Auto dealer plates now linked to national law enforcement database

(INDIANAPOLIS) May 24, 2012– Secretary of State Connie Lawson is pleased to announce Indiana auto dealer plates are now linked to the National Law Enforcement Telecommunications System, a national database for law enforcement officers. Linking Indiana auto dealer plates to the national database provides law enforcement nationwide with access to real time information, greatly reducing the appeal of Indiana plates for illegal purposes.
“This is a huge step forward for our long-term security,” said Secretary of State Connie Lawson. “By ensuring dealer plates can be tracked by local and national law enforcement agencies, we can better protect Indiana’s legitimate auto dealers, and deter the theft of these plates for criminal use around the country.”

Prior to this enhancement, law enforcement outside the state could look up an individual’s personal vehicle information, but were unable to access Indiana dealer plate data. Law enforcement can now access information on metal dealer plates used for dealership business such as test drives and paper temporary plates issued when a vehicle is sold. Law enforcement will use the enhancement to instantly access data in routine traffic stops and to solve crimes.

The Auto Dealers Services Division of the Secretary of State’s office worked with the Bureau of Motor Vehicles and the Indiana State Police to link to the national database.

Through the BMV and State Police systems, dealer plate and registration information makes its way to the national database.


Supreme Court Upholds Health Care Law
What Will It Mean For You?
The US Supreme Court has found in favor of the health care law by deeming the individual mandate unconstitutional under the commerce clause however now calling it a tax so the mandate is upheld. By doing so, some of the key factors that will be taking place in the year and a half are as follows:
§  Individual Mandate: Starting in 2014, everyone in the US must buy health insurance or will be subject to tax. Those who cannot afford to buy health insurance, (families at poverty level) will be subsidized by the government. Families making over $80,000 per year will not receive a subsidy. This provision was the heart of the lawsuit. The individual mandate goes hand-in-hand with the next provision; guaranteed issue.  Making everyone buy insurance stops people from buying it only when they become sick.
§  Guaranteed Issue: Also starting in 2014, all health insurance companies must accept all applicants regardless of pre-existing conditions. NIADA members have access to guaranteed-issue, limited medical right now by visiting
§  Minimum Essential Coverage (MEC): This provision states that the government will regulate what plans will cover and not cover as a means to qualifying acceptable coverage.  Having acceptable coverage means not facing fines/penalties. It is expected that the highest deductible for a single will be $2,000 and $4,000 for a family. This, however, could jeopardize Health Saving Accounts (HSA’s), which are linked to high-deductible health plans and are a popular option for the self-employed and for small businesses.
§  Health Insurance Exchanges: Each state will set up a health insurance exchange for consumers to shop for health plans.  If they qualify, they will be able to receive subsidies through the exchange.  members can visit the NIADA Health Insurance Exchange right now to shop rates from multiple carriers through
Additional questions on the law and how it will affect you? NIADA members can call the NIADA Member Health Insurance hotline at 1-888-308-9340 or visit

August 12, 2011 Recently the Federal Reserve Board (FRB) along with the Federal Trade Commission (FTC) developed new rules for the issuance of Risk Based Pricing & Adverse Action Notices. As you may be aware, beginning July 21, 2011, Risk Based Pricing Notices or Adverse Action Notices given to customers were required to include the following information: 1. A numerical credit score used in making the credit decision; 2. The range of possible scores under the model used; 3. Up to four factors that adversely affected the consumer’s credit score (or up to five factors if the number of inquiries made with respect to that consumer report is a key factor); 4. The date on which the credit score was created; and 5. The name of the person or entity that provided the credit score. Sample forms developed by the FRB and FTC which include these changes go into effect on August 15, 2011 and for your convenience we have provided links to these updated regulations and sample forms at and below. >> Final Rule for Adverse Action Notices >> Final Rule for Risk-Based Pricing >> Sample Forms: Risk-based Pricing The NIADA along with our network of state affiliate organizations is available to help you better understand the effects of these new developments. Please take a moment to review these regulations and the forms you are using when giving your customers Risk Based Pricing or Adverse Action Notifications. There are multiple versions of these forms and the appropriate form option for your operation should be determined by a review of these new guidelines and advice from your own legal counsel. Additionally, most dealer management software (DMS) companies have already updated the forms in their systems to reflect these new changes; however, if you subscribe to a DMS system, you may want to double check just to make sure. If you have any questions or additional thoughts, feel free to contact us here at the NIADA headquarters at (817) 640-3838. At your service, Steve Jordan Chief Operating Officer NIADA


Amended Risk-Based Pricing Regulations and Reg B Notices The Federal Reserve Board and the Federal Trade Commission (the “Agencies”) have issued final rules to implement the credit score disclosure requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). Risk-Based Pricing Regulations The Agencies jointly released amendments to the Risk-Based Pricing Rules to require disclosure of credit scores and related information in risk-based pricing notices if the creditor uses the consumer’s credit score to set the material terms of credit. The final rule implements the provision added to Section 615(h) of the Fair Credit Reporting Act (“FCRA”) made by Section 1100F of the Dodd-Frank Act. The final rule requires creditors to disclose certain information to consumers when creditors use a credit score to set or adjust the terms of credit, including: (1) the credit score used by the person in making the credit decision; (2) the range of possible credit scores under the model used to generate the credit score; (3) all of the key factors that adversely affected the credit score, which must not exceed four key factors. However, if one of the key factors is the number of inquiries made, the number of key factors must not exceed five; (4) the date on which the credit score was created; and (5) the name of the consumer reporting agency or other person that provided the score. The final rule also requires a statement that a credit score is a number that takes into account information in a consumer report, that the consumer’s credit score was used to set the terms of credit offered, and that a credit score can change over time to reflect changes in the consumer’s credit history. The final rule includes model forms. The credit score disclosure requirement is mandatory as of July 21, 2011. Adverse Action Notices Section 701 of the Equal Credit Opportunity Act requires a creditor to notify a credit applicant when it takes adverse action. Section 615(a) of the FCRA requires a person to provide a notice when the person takes an adverse action against a consumer based in whole or in part on information in a consumer report. The Federal Reserve Board also released the final rule for the revised model notices to reflect the new content requirement in Section 615(a) of the FCRA made by Section 1100F of the Dodd-Frank Act. The revised content of the model forms contained in Appendix C, Forms C-1 through C-5, must include the same information as shown above. The disclosures must appear primarily in narrative format, after the information related to the reasons for why adverse action was taken and the statement that the creditor obtained information from a consumer reporting agency. Use of the revised model forms is mandatory as of July 21, 2011. Thomas B. Hudson, Esq. Editor in Chief, CARLAW LLC Direct Dial: 410.865.5411 Toll Free: 877.464.8326 ext.5411 Fax: 410.684.2001 E-Mail:


Mandatory new ordering program for Interim Plates became effective April 30, 2010 for all automotive dealers in Indiana. Through the Plates On-Demand program, automotive dealers access and print temporary plates online as they are needed instead of ordering the plates in bulk and having them shipped. A new temporary plate design is also part of the up-graded program.
Click below for details & instructions on the Indiana Secretary of State Dealer website: <a href=" ">Click Here</a>

Increasing Online Traffic to IIADA Members

Auto Search Technologies, Inc. is currently working on a project for IIADA members to increase online traffic to dealerships. 

IIADA Members, 

Auto Search Technologies, Inc. partnered with the NIADA as one of their newest member benefit providers. 

Because Auto Search Technologies, Inc. values the quality of the IIADA and its members, Auto Search Technologies, Inc. has developed a package tailored specifically for members of the IIADA. With the purchase of the Auto Search Online or AutoBAHN website, IIADA Members will receive 12 (twelve) complimentary months of the AutoHitList National Dealer Listing Network as well as one of the following items: 

IIADA Membership Renewal Fees | Flash Upgrade | Automatic Inventory Import | Logo Design Package | 6 Months Craigslist Template Manager | 6 Months Web Hosting | 6 Months eCommerce/ BHPH

Auto Search Technologies, Inc. (AST) is an automotive software engineering firm that creates innovative and highly advanced web technologies. AST was developed by software engineers, not marketing reps; therefore, giving us the needed tools and understanding of the strict requirements necessary to be found on the Internet and through the search engines (Google, Yahoo, MSN, AltaVista, AOL, etc). By utilizing this knowledge, all of our software is capable of presenting our dealers and their inventory to their potential customers and target audience within their desired demographic. Auto Search Technologies, Inc has developed both products (Auto Search Online) as well as numerous services (AutoHitList) to cater to all client needs. We combine science and art to give our clients the best online presence for their dealership and inventory. 
Our products and services are cost effective and powerful. Through our exclusive SEO traffic targeting system, outstanding customer service, and affordable technologies our dealers are ranking above their competition all over the Internet. Best of all, we can prove it. Our team will take your dealership and bring it to life on the web, making your website one of your best and most cost effective marketing tools. 

Auto Search Online: 
The Auto Search Online is a stand alone web application packed with SEO (Search Engine Optimization) that is dominating the top of the search engines (Google, Yahoo, MSN, AltaVista, AOL ...etc). This individual dealership website allows dealerships to list unlimited vehicles online with unlimited photos, with no monthly fees. The Auto Search Online allows dealers to be found by potential customers who are either looking for the vehicles on their lot, or whatever general search terms or phrases that they would like to be found under online.

The AutoHitList National Dealer Listing Network is a service developed to take online vehicle listings to the next level. In addition to having your inventory listed in, as part of the service we publish dealer inventory to thousands of website pages and websites all over the Internet without any additional data entry by just by being a member of the AutoHitList National Dealer Listing Network. Other Premium Services include eCommerce, Stock Image, News and Blogs, and much more.