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2017 IADA OFFICERS

Chairman

Dan Roesch
Roesch Auto Group
Elmhurst


Vice Chairman
Pat Manning
Brad Manning Ford
Dekalb


Treasurer
Mike Ettleson
Ettleson Cad-Bu-GMC, Inc.
Hodgkins


Secretary
Rick Yemm
Yemm Auto Group
Galesburg


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

 
     

Your IADA Partner
Moving Vehicle Registration into the future






 
February 16, 2018   Volume 2018, Issue 2

  Hyundai Settlement Offer  
  Hyundai Motor America has sent a letter to Hyundai dealers explaining its plan to recast its Genesis vehicles as a new line-make and reduce the number of dealers who will be able to sell Genesis-branded vehicles.  The letter includes a settlement offer to pay Hyundai dealers an amount based on the number of retail sales of Genesis vehicles during 2017 in exchange for the dealer surrendering his or her rights to sell Genesis vehicles.  The settlement offer also includes provisions for Hyundai to repurchase unwanted Genesis vehicles, parts, and special tools. 

It is IADA's understanding that a separate letter will be sent to a small number of Hyundai dealers, including those dealers who have received the settlement offer, permitting those dealers to continue selling Genesis vehicles.  It is our further understanding that the terms of the "continuation" letter will require the dealer to build a separate Genesis-only dealership facility.

IADA has been in contact with the National Automobile Dealers Association to clarify some of the provisions in the settlement offer, but right now it appears that Hyundai dealers have the following options:

(1)   Accept the settlement offer and stop selling Genesis-branded vehicles going forward.

(2)   If the dealer does not receive a continuation letter but wants to continue selling Genesis-branded vehicles, he or she can challenge Hyundai's decision to withdraw permission to sell Genesis vehicles under the Motor Vehicle Franchise Act, which prohibits a manufacturer from changing the distribution and allocation of new motor vehicles in a manner that is arbitrary and capricious and which also prohibits a manufacturer from terminating or materially modifying the sales and service agreement of a dealer unless the manufacturer has good cause to implement the termination or modification. 

(3)   If a Hyundai dealer gets a continuation letter from Hyundai, he or she can sign the agreement and sell Genesis-branded vehicles according to the terms of the new agreement.  We have not seen an example of the continuation letter, but it is expected to require Genesis dealers to construct new dealership facilities, which could violate the arbitrary and capricious allocation provisions and the material modification of the sales and service agreement discussed above.

IADA will notify you as we learn more about Hyundai's plans for the Genesis brand.  In the meantime, we recommend that Hyundai dealers review the settlement offer with their own legal counsel.

If you have any questions about this article, please feel free to contact IADA at (217) 753-0220 or ldoll@illinoisdealers.com. 

LEGAL ISSUES DISCUSSED IN THIS BULLETIN ARE FOR GENERAL INFORMATION AND ARE NOT LEGAL ADVICE.   DEALERS SHOULD CONSULT PRIVATE LEGAL COUSEL FOR APPLICATION IN PARTICULAR CASES.
 

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  Motor Vehicle Advertising Rules  
  IADA staff recently met with staff from the Illinois Attorney General's Office and the Better Business Bureau to discuss common enforcement actions related to violations of the Attorney General's motor vehicle advertising rules. Attorney General's Office staff advised that the most common violations include the following:
  • Prize Promotions. One advertising matter that has received a great deal of attention from the Attorney General's Office is the use of prize promotion mailers that initially make it appear as though the recipient has won one of the 2 or 3 big prizes being offered, but when the recipient tries to collect the prize, he or she finds out that he or she was merely entered into a drawing for a chance to win one of those prizes.  If you advertise that a customer has won a prize, but he or she really won a chance to win a prize, it is a violation. 
  • Advertised Price. The Attorney General's Office reported that some dealers have advertised incorrect stock numbers on vehicles that are offered at steep discounts or advertising vehicles that have already been sold.  Other cases have involved price advertisements that are thousands of dollars below the actual price of the actual selling prices of vehicles once the customer walks into the dealership. If the dealership installs aftermarket products without including the cost of those products in the advertised price, it is a violation of the advertising rules.  All of these practices violate Section 475.310 of the advertising rules, which requires that purchasers should be able to obtain vehicles at the advertised price. 
  • Limited Rebates. Section 475.590 of the advertising rules prohibits deducting a rebate from the final price of a vehicle if the rebate is not available to all customers.  Instead, a limited rebate must be separately stated.  If your manufacturer offers a rebate that is available only to customers who finance the deal through the manufacturer's captive finance company, that offer must be treated as a limited rebate and the conditions of the offer must be disclosed in the advertisement.  
  • Free Gifts. Section 475.590 prohibits dealership offers of a free gift in connection with the sale or lease of a motor vehicle.  This ban includes, but is not limited to, offering free tires or lifetime oil changes to purchasers or offering a free third-party warranty to a vehicle customer.   In some states, non-motor vehicle retailers have boutique motor vehicle displays that offer free warranties, which is a clear violation of the free gift rule and could cause problems for dealers if the program comes to Illinois. A free gift is permissible only if it is offered as part of a manufacturer program or a manufacturer-approved advertising association program.
  • Trade-ins. Section 475.540 prohibits a dealer from offering a guaranteed trade-in allowance.  This prohibition extends to an offer to pay a guaranteed percentage of the book value of a customer's trade-in.  
Dealers need to monitor their website very carefully to review content that may be placed onto the website by the manufacturer.  Many times manufacturers will download content onto dealership websites that violates the advertising rules and, once that content appears on a dealership website, the Attorney General's Office will hold the dealer responsible for any violations.  Similarly, if you use a new advertising or promotional company, especially one from out of state, be sure that they are familiar with the Illinois Motor Vehicle Advertising Rules and review their work before it goes out the door.  Once the Attorney General's Office starts looking at advertising violations, it may turn up transactional violations such as improper spot deliveries or the sale of vehicles without possession of the title, as well.

Please take a few moments to review the Illinois Motor Vehicle Advertising Rules and Related Statutes to make sure that your advertisements are compliant.  A copy of the Illinois Motor Vehicle Advertising Rules and Related Statutes can be found here.  

If you have any questions about this article or any other advertising matters, please contact IADA at (217) 753-0220 or ldoll@illinoisdealers.com.
 

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  Governor Delivers Budget Address  
  This week Governor Bruce Rauner presented his FY 2019 budget proposal before Illinois lawmakers.  This was the Governor's final budget address of his current term where  he outlines his vision and spending priorities for Illinois as he heads into his re-election attempt.  Some of the items the Governor is attempting to accomplish include the following:
  • Seeking to cut $228 million for teachers' pensions
  • Cutting $101 million from university pensions
  • Removing of group health insurance for state employees from collective bargaining discussions
  • Selling the Thompson Center in downtown Chicago
  • Rolling back a portion on the income tax increase that passed last year
  • Shifting suburban/downstate pension costs from the state and give to local units of government
Obviously, we have a long way to go before agreeing to a budget deal for FY 19. Currently, the bill backlog stands at about $9 billion, Illinois is still substantially upside down despite passing the largest income tax increase last year to pay back old bills. In addition to Illinois budget woes, the state has one of the worst under funding problems in the nation with regards to pension liabilities, estimated at over $200 billion.  
 
At this point in the legislative process, bills are being introduced and being assigned to their respective committees. We will keep membership updated on issues affecting Franchised dealers.
 

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  Redistricting Process  
  Every 10 years following the national census, Illinois is required to redraw its congressional and legislative boundaries to reflect population changes. The task before the legislature is an extremely political endeavor, as the mapmaking process will determine representation in the general assembly for the next 10 years.
 
Redistricting is the reason this year that the upcoming elections are critical. A decade ago the democrats controlled both chambers in the legislature and the governor's office, essentially allowing the democrats to control redistricting process.  If the democrats win the 2018 governor's office they will once again shut out the republicans and control the mapmaking process basically, allowing the democratic party to run the general assembly process for the next 10 years.

 

 

 

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  Senate Bill 2420 - Opening Car Sales on Sundays  
  For the 5th consecutive year, Senator Oberweis has introduced legislation to repeal the Sunday closing law. The new wrinkle this year is to call this legislation " the freedom to choose act". Essentially allowing dealerships the opportunity to be open on any six days of the week of their choice, including Sunday. This is another back-handed attempt by Senator Oberweis to allow vehicle sales on Sundays. His focus is that if one dealership opens on Sundays, many others will follow. As always, IADA will attempt to defeat his legislation in committee. This sponsor is very driven the past few years to open dealerships on Sundays.
 
IADA will update membership once legislation is posted for a committee hearing.
 

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  KPA Client Alert  
 








EPA-Refrigerant Sale Restrictions
and Recordkeeping Requirements for
Motor Vehicle Air Conditioning (MVAC)

Effective January 1, 2018

Beginning January 1, 2018, in accordance with "Section 609 of the Clean Air Act: MVAC," the EPA has extended the requirement that only EPA-certified technicians can purchase refrigerants containing CFC-12, HFC-134a, and CO2, HFC-152a, or HFO-1234yf.

KPA Training Available

KPA is an EPA-approved partner for training and certifying individuals under Section 609 of the Clean Air Act. Complete KPA's "AC 609: Working with MVAC Systems" technician certification training at myKPAonline.com.

Go to Training > My Training to access the AC 609 training. It will either be listed in your Required Training or Optional Training queue.



What Do You Need to Do?
  • Ensure technicians are AC609 certified and maintain documentation.
  • Document that your facility owns and operates EPA-approved equipment.
  • Maintain records of the names and addresses of facilities where MVAC service shops send their recovered refrigerant.
  • Maintain sales records for refrigerants in any size container, and ozone-depleting MVAC refrigerants in containers of 20 lbs. or more. (Note: Recordkeeping requirements do not apply to the sale of small containers (less than 20 lbs. of CFC-12 or less than 2 lbs. of substitute MVAC refrigerants (i.e., HFC-134a). 
  • Retain invoices for the sale of refrigerants, and blends, that include:
    • The name of the purchaser
    • The date of the sale
    • The quantity of the refrigerant purchased.
  • Maintain all records related to the sale of refrigerants for a minimum of three years.
  • If you're a General Motors (GM) dealership, you'll need to submit a copy of your AC609 Certification to them. Write your dealer code on your certification and fax it to 574-389-2693.

Questions?

You can view the new regulations on the U.S. EPA website.

For additional information regarding this requirement or to discuss onsite training, please contact your KPA consultant or KPA's Client Success Center at 800-486-0400, option #2, or email support@kpaonline.com.
 

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  Mark your calendars for the 2018 IADA CATA Spring Conference - Scottsdale, AZ  
 
IADA Chairman, Dan Roesch, is pleased to announce the 2018 IADA/CATA Spring Conference will be held at the beautiful Fairmont Princess Resort, Scottsdale, Arizona, April 11-15, 2018.

The AAA Five Diamond Fairmont Scottsdale Princess provides the perfect setting to enjoy al fresco living in the blooming Sonoran Desert. As in the Native American tradition, you'll live in harmony with nature...vast open spaces, lushly landscaped grounds, regal Saguaro cacti and a burning orange sun sinking behind the majestic mountains will inspire and energize you. From the rich purple hues of the desert sunset to the green agave plants and coral pinks and butter yellow of blooming cactus flowers, the natural palate at play is of the most unique and stunning in the world.

With four top-ranked Arizona restaurants, inspiring indoor and outdoor meeting facilities, innovative spa, fitness programs, six sparkling pools, including the all-new Sunset Beach, two newly renovated 18-hole championship golf courses, one of which is home to the Annual PGA Tour Waste Management Phoenix Open - this highly acclaimed Scottsdale resort is truly an experience like no other. 

See the attached flyer for registration information.
 

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