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2012 IADA OFFICERS
Chairman
Jim Lombardi
Lombardi Chev Buick
Wilmington
Vice Chairman
Gary Knight
Carmack Car Capitol
Danville
Treasurer
Mike Mangold
Mangold Ford
Eureka
Secretary
Dave Taylor
Taylor Chrysler Dodge, Inc.
Bourbonnais
President
Peter Sander
IADA
Springfield
IADA Staff Contacts:
Ph# 1-800-252-8944
Pete Sander
President
Ext. 103
psander@illinoisdealers.com
Larry Doll
Legal
Ext. 105
ldoll@illinoisdealers.com
Mark Harting
Administrative Services
Ext. 110
mharting@illinoisdealers.com
Mike Healey
Member Services
Ext. 107
mhealey@illinoisdealers.com
Joe McMahon
Legislative
Ext. 113
jmcmahon@illinoisdealers.com
Meghan Sander
Member Communications
Ext. 109
msander@illinoisdealers.com
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Your
IADA
Partner
Moving Vehicle Registration Into The Future
(click logo for more details)
Upcoming Webinars
June 28th
Charles Feuss, J.D.
Fearless Firing - How to Terminate an Employee the Right Way and How to Prevent Downstream Legal Problems (12 PM CST)
July 12th
Clayton Stanfield
How to Sell Parts & Accessories on eBay - Secrets from Dealership Power Sellers (12 PM CST)
July 19th
Phillip Sherman
The Dos and Don'ts of Choosing a Telephone System Upgrade - Including the DMS Options (12 PM CST)
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June 28, 2012 Vol 2012, Issue 8
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NADA TASK FORCE TO TACKLE FACILITIES PROGRAMS, 2-TIER PRICING
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A new National Automobile Dealers Association task force will push for changes in manufacturer’s facility renovation and incentive programs that lead to perceived 2-tier pricing. NADA Chairman, Bill Underriner, thinks one solution is NADA leaders will take a more active role with automakers on these crucial issues. "We want these programs to be flexible and to be fair and to benefit all dealers in the same way," said Underriner, a franchised dealer in Billings, Montana. "We think it shouldn't be the big dealer against the little dealer or the city dealers against the rural dealers."
An NADA study released in February determined that the facility renovation programs are too costly and provide vague results. NADA has asked manufacturers to make changes, yet few have been made.
Dealers have been criticizing NADA for not pushing the manufacturers harder on the issues, more specifically, the stair-step incentive program. The bonuses paid to dealerships for abiding with facility guidelines or meeting stair-step sales goals can lead to dealers effectively paying different prices for the same vehicles, critics say.
NADA’s recently appointed task force aims to tackle these issues by the end of the summer. Forest McConnell III, a Honda-Acura dealer, from Montgomery, Alabama is leading the task force.
Glenn Mercer, the former McKinsey & Co. partner who conducted the research in February, will guide NADA efforts to determine the payback for dealers who renovate their facilities. Mercer is inquiring about dealership financial information to determine ROI data.
NADA is updating its twice-a-year dealer attitude survey to include questions about manufacturer facility requirements. Source: Automotive News
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LOCALLY IMPOSED SALES TAX CHANGES EFFECTIVE JULY 1ST
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Beginning July 1, 2012, the rates of certain locally imposed sales taxes that are administered by the Illinois Department of Revenue will change. Please refer to the attached bulletin from the Illinois Department of Revenue to see if you are affected. Please note that these sales tax rate changes apply only to general merchandise and do not apply to vehicles. The following taxes are affected: home rule sales tax, non-home rule sales tax, business district sales tax, county public safety tax, and county school facility tax. The Department of Revenue bulletin can be found here:
http://tax.illinois.gov/Publications/Bulletins/2012/FY-2012-08.pdf
Source: Illinois Department of Revenue
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TUESDAY IS MOST POPULAR DAY FOR AUTOMOTIVE SOCIAL MEDIA
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 According to Socialbakers.com, new data illustrates that although Sunday is the busiest day for social media platforms, automotive topics create the most buzz on Tuesday and Wednesday. The data shows the driving force within the consumer interaction is the visual content, such as photo albums and videos, in the social media posts.
Jan Rezab, Socialbakers chief executive, said: “To maximize fan engagement, brands need to tailor social media updates according to their audiences browsing habits. While they must maintain engagement throughout the week, they should consider posting their most compelling content at times of peak engagement to ensure the greatest online brand buzz.” Responsiveness of businesses to fan posts on Facebook is up 10% since last October.
The internet plays a huge role in the decision-making process for many consumers. Therefore, dealerships need to create and maintain a social media presence to ensure they are communicating with their consumers at every possible angle, especially when it comes to discussing their products and services online.
Source: Social Media Council Europe
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IT'S TIME TO NOMINATE THE TIME MAGAZINE QUALITY DEALER AWARD
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IADA is looking to its members to help nominate the 2013 Time Quality Dealer Award Nominee. All dealers nominated should meet the following criteria:
• Exhibit exceptional performance in their dealership
• Act as a well-rounded citizen, distinguished in community service
• Create a positive public relations forum for all new car dealers
• Participate as an active member of IADA and NADA
• Act as the designated operating head of a franchised new car dealership, working at least 75% of the time.
To make your Time Quality Dealer Award Nomination, please fill out the nomination form attached with this bulletin. Nominations are due by Friday, July 20th, 2012.
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SUPPORT YOUR IADA POLITCAL ACTION COMMITTEE
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As of this date approximately 50% of our Illinois dealer members have made a contribution to CAR of Illinois for 2012. With fall general election fast approaching, it is important that CAR of Illinois is properly funded to provide needed assistance. IADA continues to receive requests for campaign assistance from legislative candidates.
CAR OF ILLINOIS (Committee of Automotive Retailers) is IADA's statewide political action committee which only supports candidates running for the Illinois House of Representatives, Illinois Senate, and state-wide offices such as the Governor, Secretary of State and Attorney General.
Since CAR is a state wide political action committee it cannot support any candidates running for a federal political office. Corporate checks are acceptable and all CAR funds collected are spent on candidates with no administrative fees allocated to IADA.
IADA is the franchised dealer's voice in Springfield on legislative and regulatory matters, a strong state political action committee, (CAR) is necessary to promote IADA's legislative program on behalf of Illinois' franchised dealers.
CAR of Illinois plays an important role and is vitally important to promote dealer interest at the state levels. The important factor is dealers need to support CAR to assist their Associations' legislative efforts!
If you have not contributed please do so today! For those dealers who have contributed your support is most appreciated! For an updated list of CAR contributors you can check our website at www.illinoisdealers.com. To make your CAR contribution, please complete the CAR Contribution form.
From your NADA Director, Jamie Auffenberg Jr., St. Clair Auto Mall, O’Fallon, IL |
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SOME MANUFACTURER STAIR-STEP PROGRAMS ARE A "CANCER IN THE INDUSTRY"
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NADA has continually supported a level playing field, equal and fair treatment for all dealers, including big and small. However, history shows that periodically manufacturer’s incentive pricing programs create short-term incentives that have favored the larger, urban dealerships as opposed to smaller, more rural dealerships.
Recent history also proves that the long-term effects of biased programs are to marginalize the smaller dealers, and place them at a competitive disadvantage in their marketplace.
These programs have led to confusion between the consumers and the dealers as to the actual dealer cost of the vehicle. This has a tendency to create uncertainty and distrust for the consumers, which causes loss of value to the manufacturer’s brand. In addition this taints the relationship between the dealer and the consumer.
Dealers of all sizes have recognized the natural injustice of a manufacturer’s biased pricing that leans the marketplace in favor of certain dealers. For example, Earl Hesterberg, CEO of Group 1 Automotive, emphasized the perniciousness of these stair-step programs as recently as May 21 in Automotive News, where he characterized them as “… a cancer in the industry that isn’t good for dealers or customers.”
The fact is, manufacturers can and are unfairly creating competitive disadvantages, and causing confusion and distrust among automotive consumers.
The most ideal solution is to sustain a level playing field for factories to build quality vehicles, and avoid unequal treatment to dealers. All dealers should be competing naturally in price and service with each other, if not, for the customer’s business.
Source: NADA |
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HOUSE PANEL EIMINATES OBSOLETE INSURANCE BOOKLET AT DEALERSHIPS
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The House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade today passed H.R. 5859, a bill that eliminates a requirement that dealers provide information on auto insurance costs to customers. The bill, which is strongly endorsed by the National Automobile Dealers Association (NADA), also eliminates a $1,000 fine per violation if a dealer is unable to produce the booklet upon the request of a car or truck buyer.
Since 1991, the federal government has printed and mailed the booklet, Relative Collision Insurance Cost Information, to all new-car dealerships. However, dealers and sales staff report that consumers rarely ask for the booklet, and the information is irrelevant to new-car buyers.
“Today, consumers can go online or make a quick phone call to compare insurance rates on different models,” said NADA President Phil Brady. “Technology has simply made printing and snail-mailing an auto insurance report, which is potentially outdated and misleading to consumers, unnecessary.”
In 2011, an Obama administration document said the booklet was “rarely used” and “not useful.” A recent NADA study of 815 dealerships revealed that for 96 percent of dealers, no customer had ever asked to see the booklet.
Dealers generally advise their customers to call their insurance agents directly for an accurate quote instead of relying on a government booklet which is printed once a year. The administration previously stated that “a prospective buyer does not need a brochure from the federal government to obtain this information, since insurance agents are trained to provide advice on how model selection affects insurance premiums.”
The bill does not prevent the government or the Highway Data Loss Institute, a non-profit organization which collects insurance data, from making the information available to the public. H.R. 5859, introduced by Reps. Gregg Harper, R-Miss., and Bill Owens, D-N.Y., is expected to be considered next by the full House Energy and Commerce committee. Click here for the 2012 Relative Collision Insurance Cost Information booklet.
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AUTOFOCUS: NADA CHAIRMAN BILL UNDERRINER DISCUSSES NEW ALLIANCE WITH J.D. POWER THAT FOCUSES ON DEALER DATA SECURITY
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A new partnership between the National Automobile Dealers Association and J.D. Power and Associates will provide dealers with more accurate and timely data, said NADA Chairman Bill Underriner, in a recent interview on “AutoFocus with David Hyatt.”
“The issue of dealer data security is a huge concern because we have different companies trying to help dealers with their data and ... we really don’t know what’s happening with that data or what they are doing with that data,” said Underriner, a new-car dealer from Billings, Mont.
NADA is working with J.D. Power to increase dealer participation in the Power Information Network (PIN) initiative. “Dealers now have a way to benchmark their sales data and compare it with other dealers in real time to see where they are in the marketplace,” Underriner added.
The partnership will also help the NADA Used Car Guide provide more accurate data on used car and truck values, he said.
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AMERICAN TRUCK DRIVERS MOVE 2013 CONVENTION AND EXPO TO ORLANDO
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Responding to an overwhelming number of positive comments from members in a post-convention survey, the leadership of the American Truck Dealers (ATD) has decided once again to hold its 2013 Convention and Expo in conjunction with the National Automobile Dealers Association’s (NADA) annual event in Orlando, Fla., next February. The two events will run simultaneously at the Orange County Convention Center in Orlando from Feb. 8-11, 2013. Online registration opens for both conventions near the end of July. For more information, visit www.nadaconventionandexpo.org.
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COMING IN JULY: DEALERSHIP WORKFORCE STUDY RESULTS
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Participants in the new Dealership Workforce Study (DWS) will receive the individualized Basic Report, as well as a DWS Industry Report, beginning in July. Both documents will be released within the dealership’s NADA University account accessible from www.nadauniversity.com. They will be located within Resource Toolbox under a new tab, “NADA Dealership Workforce Study,” and will be accessible only to user accounts authorized to receive dealer access. NADA University will work with participating dealerships to ensure access is authorized. Participating dealerships will have the opportunity to purchase an Enhanced Report, which will provide even more comparative data, for a nominal fee. Dealerships that did not participate may purchase the DWS Industry Report. For more information, contact NADA University Customer Service at (800) 557-6232. |
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LEGAL REMINDER: SALES TO FOREIGN CUSTOMERS
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Before you sell a vehicle to a customer who will export it outside of the United States, there are several items to consider.
(1) New or Used? If you are selling a new unit that will be exported out of the United States, you should carefully review your sales and service agreement to make sure you don’t cost yourself factory sales incentives. Additional information about exporting new units can be found here: http://www.votervoice.net/Core/Common/commonpopup.aspx?control=DisplayNewsLetter&NewsLetterId=9639#60762
(2) OFAC. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) prohibits all U.S. persons from doing business with specially designated organizations and persons. OFAC maintains a list of persons with whom you may not conduct business on its Specially Designated Nationals and Blocked Persons (SDN List) at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx. You should make sure you check your buyer against the SDN List. Additional information can be found on the Treasury’s website at: www.treas.gov/offices/enforcement/ofac/faq/#gen_ques. (Note: The OFAC Provisions apply to all sales, not just sales to foreign customers).
(3) Identity Theft Red Flags. All dealers are required to have an Identity Theft Red Flags program in place. Although the Identity Theft Red Flags provisions apply to all transactions, foreign customers merit a bit of extra attention, especially if the customer does not come into your dealership. Additional information about Identity Theft Red Flags programs can be found at: http://www.illinoisdealers.com/iada_news.aspx.
(4) Cash in Excess of $10,000. If you receive more than $10,000 in cash in a single transaction or in related transactions, the IRS requires you to report it on Form 8300. General information about cash reporting can be found on the IRS website at: http://www.irs.gov/pub/irs-pdf/p1544.pdf. Form 8300 and its instructions can be found at: http://www.irs.gov/pub/irs-pdf/f8300.pdf. (Note: The cash reporting rules apply to domestic and foreign customers).
(5) Illinois Sales Tax. If your customer intends to title and register his or her vehicle in Canada or Mexico, you can issue a driveaway decal and you are not required to collect Illinois Sales Tax. The Illinois Department of Revenue treats both Canada and Mexico like other States that do not impose a retaliatory Sales Tax. If the customer will title and register the vehicle in any other foreign country, the transaction is still exempt from Sales Tax, provided that you document it properly. Illinois Sales Tax does not apply to sales that take place in Illinois if the seller is obligated to deliver the vehicle to a point outside of Illinois not to be returned to Illinois. Similarly, Illinois Sales Tax does not apply if the dealer is obligated to use a carrier to deliver the vehicle to a point outside of Illinois, not to be returned to Illinois. It does not matter whether the dealer or the customer arranges for the vehicle to be delivered outside of Illinois, but the dealer must be shown as the shipper on the bill of lading or the exemption will be destroyed. The Illinois Department of Revenue rule can be found at: http://www.ilga.gov/commission/jcar/admincode/086/086001300F06050R.html.
If you have any questions about selling vehicles to foreign customers, please feel free to contact IADA legal at (217) 753-0220.
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