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2010 IADA OFFICERS
Chairman
John Wolf
Wolf Chevrolet Sales, Inc.
Belvidere, IL
Vice Chairman
Tim Mooney
Tim Mooney, Inc.
Tuscola
Treasurer
Jim Lombardi
Lombardi Chev Buick
Wilmington
Secretary
Gary Knight
Carmack Car Capitol
Danville
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Your IADA Partner
Moving Vehicle Registration Into The Future
(click logo for more details)
 Your
IADA
Partner
For Insurance Solutions to
Protect Your Dealership
(click logo for more details)
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August 20, 2010 Vol 2010, Issue 4
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ILLINOIS NADA DIRECTOR ELECTIONS
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 Jamie Auffenberg Jr., President of St. Clair Auto Mall, O’Fallon; Auffenberg Ford North, O’Fallon and Auffenberg Ford South, Belleville, has been nominated to serve as the NADA director representing the State of Illinois. His term will begin immediately to serve the remainder of Rick Gregg’s term which expires in February 2012. Jamie is a Board Member of IADA, previously served on the IADA Executive Committee and was the committee liaison with the IADA Insurance Trust, is a Past Chairman of the AIADA and a President’s Club Member of DEAC, the Dealers Election Action Committee.
 Mark Scarpelli, President of Raymond Chevrolet-Kia in Antioch, was elected to a three-year term as NADA director serving Metropolitan Chicago. His term will become effective during the NADA 2011 Convention in San Francisco. He succeeds his father, Ray Scarpelli Sr., who is stepping down after holding the post since 2002. Mark is a past president of CATA.
IADA extends its congratulations to both these Illinois dealers and looks forward to working with them in representing Illinois dealers on the NADA Board of Directors.
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CASH FOR CLUNKER AUDITS
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Dealers have advised IADA that NHTSA notified them that certain transactions under the “Cash for Clunkers” program have resulted in erroneous payments to the dealers. The most common examples have included dealers claiming Cash for Clunkers payments for transactions in which either the trade-in or the new vehicle were ineligible for a Cash for Clunkers payment. The notifications require the dealer to review the transaction and return the payment if the dealer agrees that it was paid in error. If the dealer does not agree that the payment was made in error, the notification requires the dealer to provide documentation to support his or her claim. Please remember that, early on in the program, NHTSA changed the mileage figures for a handful of vehicle models. Therefore, if you have a copy of an EPA mileage comparison that shows that the transaction qualified for a payment, you can use that to support your claim. (A mileage comparison issued by the factory or some other private entity does not qualify). If you receive a Cash for Clunkers notification from NHTSA and you have any questions about how to proceed, please contact IADA at (217) 753-0220. |
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ATTORNEY GENERAL UPDATE
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On July 27th, IADA participated in a meeting with staff from the Attorney General’s Office and the Better Business Bureau to discuss frequently-occurring advertising violations and other concerns. The most common violations included the following:
(1) Trade-in liens not paid off. The Attorney General’s Office said that it continues to see instances where a dealership takes a trade-in and fails to pay off the outstanding lien, defrauding the customer and leaving him or her with two car notes. The Attorney General’s Office noted that this problem occurs most frequently in the case where a dealership goes out of business and noted that a dealer who purchases a closing dealer’s inventory should exercise caution. IADA suggests withholding payment for the closing dealer’s inventory until after the titles clear.
(2) Spot deliveries. When a dealer spot delivers a vehicle, if the customer must return the vehicle because he or she cannot obtain suitable financing, then the dealer cannot retain a mileage or usage fee. The dealer must return the entire deposit or down payment. (815 ILCS 505/2C)
(3) Selling price. If you advertise a vehicle price, you cannot sell that vehicle for more than that advertised price. An internet special must be available to all customers, even the ones who did not see the internet. Additionally, if the customer’s trade-in has negative equity, you cannot roll that into the purchase price. (475.310)
(4) Limited rebates. You cannot include a limited rebate in the advertised price of a vehicle. If you sell a vehicle at a price that includes a limited rebate, but later find out that the customer does not qualify for the limited rebate, you cannot collect the rebate amount from the customer. IADA suggests that, if you sell a vehicle before confirming that the customer qualifies for a limited rebate, you should not deduct the rebate from the price. If the customer can subsequently prove that he or she qualifies for the rebate, you can rebill him or her at the lower price. (475.530)
(5) Price range problems. If you advertise the low end of a price range, then you also must state the high end of the price range. For example, if you say “as low as $299 a month”, you must also include the high end of the monthly payment. (475.390)
(6) Coupons. The Consumer Fraud Act prohibits offering a coupon in connection with a retail sale of a vehicle. The prohibition bans both paper coupons and internet coupons and includes a ban on any coupon to increase the value of a trade-in. (815 ILCA 505/2J.1)
(7) Online trade-in evaluation. A dealer who uses an online trade-in evaluation program that lets a customer find out the value of his or her trade-in cannot guarantee a price for the trade-in. If a dealer uses on online trade-in evaluation program, the dealer should make it clear that the trade-in value is only an estimate and is subject to adjustment after actual inspection. (475.540)
(8) Bilingual transactions. If you engage in any kind of bilingual transaction, you must be sure to have the customer sign the proper disclosure. If the customer brings in an interpreter, then you must have the customer and the interpreter sign a form designating the interpreter. If you conduct the transaction in the customer’s language, oral or written, make sure to have the customer sign form written in the customer’s language stating that the customer voluntarily agrees to use the retailer as his or her interpreter. The required text for the forms can be found in Section 2N of the Consumer Fraud Act. (815 ILCS 505/2N)
(9) Electronic advertising disclaimers. In electronic advertising, any disclaimers required by the advertising rules must appear in the advertisement itself. If the customer has to click onto a hyperlink to get to the disclaimer, then the disclaimer does not comply with the advertising rules. Similarly, if the disclaimer is visible in the advertisement, but is not in at least 10 point font or the reader has to roll the mouse over the disclaimer before it will enlarge to at least 10 point font, the Attorney General’s Office will not consider it to be clear and conspicuous as required by the rules. (475.210, 475.220, 475.230)
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UPDATE FOR IADA/CVR PROGRAM
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We are pleased to advise that updates have been completed for the IADA/CVR Electronic registration Program. These are items participating dealers have requested and have now been incorporated into the program. Listed, listed below are some of the key elements of the new CVR 4.0 release. IADA will be covering these items in detail at our upcoming seminars.
· Improved & Expanded Reciprocal/Non-Reciprocal Tax Only Functions
· Dealer Incentive Functionality
· New On Demand Bundle Report Capability
· Improved Multiple & Single Title Clerk Functions
· Inquiry Preload Functionality for Most Transactions
· Allow remitters functionality to process RUT-25 deals on behalf of out-of-state dealers
· Allow remitters functionality to process ST-556 deals on behalf of in-state dealers
· Allow consolidated dealers functionality to process RUT-25 courtesy delivery deals on behalf of out-of-state dealers.
· Allow "Batch" Processing
· Updated Graphical Interface |
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NADA SAN FRANCISCO REGISTRATION OPENS
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The NADA San Francisco Convention to be held February 5-7, 2011, registration is open and an initial brochure has been forwarded to all NADA members this week. It provides the convention schedule, city and hotel information, registration/housing policies and procedures and form. All convention information is also posted on the convention webpage at www.nadaconventionandexpo.com. Register early to get the hotel of your choice! |
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EMPLOYER STATE & FEDERAL TAX INCENTIVES
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IADA would like to remind you about recent State and federal tax incentives for employers who hire additional employees. Please note that the qualifications for the tax incentives are not identical and that if you do not qualify under one program, you may still qualify under the other.
Illinois Income Tax Credit—Hiring New Employees
An Illinois business with 50 or fewer employees (all locations combined) may qualify for a $2,500 income tax credit for each new full-time employee hired between July 1, 2010 and June 30, 2011. In order for an employer to qualify for the credit, the new job must:
- be sustained for at least one year;
- pay at least $13.75 per hour (or the equivalent); and
- be full-time employment (at least 35 hours per week).
Internal Revenue Service -- HIRE Act Income Tax Credit
The federal Hiring Incentives to Restore Employment (HIRE) Act includes 2 key potential dealer benefits for employees hired this year.
1. If an employer hires a person who has been unemployed for more than 2 months, the employer may qualify for a 6.2% payroll tax incentive, effectively negating the employer’s share of Social Security taxes on the employee’s wages earned after March 18, 2010. To be eligible, an employer must hire a “qualified” employee, who:
- Starts work between February 3, 2010, and January 1, 2011 (note that only wages paid after March 18 will be eligible);
- Must not have worked for more than 40 hours over the preceding 60 days before the date of hire. (The employee must certify this by signing an affidavit);
- Must not replace a current employee unless that employee resigned or was terminated for cause;
- Must not be related to the owner of the business or have more than a 50% ownership interest;
- May have been previously laid off by the employer; and
- May be full-time or part-time employees.
2. If the employer retains newly hired employee for 52 continuous weeks, it will also be entitled to a tax credit of up to $1,000. This credit would be filed on the employer’s corporate tax return.
Additional information about the HIRE Act can be found at www.irs.gov. |
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OUR IADA PARTNER ZURICH
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Zurich makes insuring your business easy. For more than 80 years, they’ve been specializing in providing commercial property and liability insurance for businesses that sell or service autos, trucks and motorcycles.
They offer a wide assortment of products including commercial property, general liability, garage liability, commercial and personal umbrella, workers' compensation, life insurance, finance & insurance products, and more. They're your one-stop-shop, offering you the convenience of working with one organization for your insurance needs. You can also benefit from their risk engineering consulting services tailored to your business exposures and a major loss team that can respond within 48 hours of a disaster - a team with the experience and authority to settle catastrophic claims quickly.
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CHECK OUT IADA ELECTRICITY PROGRAM - PRICES AT 6 YEAR LOW
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The global financial crisis has had a negative impact on most sectors of the economy. However, one positive aspect of the weakening economy has been lower energy prices. Energy market conditions have fallen approximately 40% from the highs reached in summer 2008.
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MYSTERY SHOP YOUR DEPARTMENT
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Article provided by Larry Edwards CMC, Chairman, Edwards & Associates Consulting, AWS Internet Service Menu, Office 704-454-5208
When was the last time you tried calling your Service Department for a service appointment or your Collision Shop for an estimate appointment?
Last month I had the occasion to shop two of our customers. One was a new customer and the other has been with us for many years. I was surprised at how bad both of them were. For the new client we shopped a customer with a vehicle that had 20,000 miles on it and had never been serviced. Our mystery customer wanted to make an appointment to bring the vehicle in and get its missed services done (is this easy sell or what!). We were on hold for 6 minutes before we were able to actually talk to a Writer. The Writer (calling this person a consultant would be an insult) would not make the appointment until the customer went and found his vehicles serial number and called back so that he could enter it into his computer system!
Our second shop approximately 10 minutes later ended with us having to leave a message for the Writer to call us back, this was after being on hold for nine minutes. On our next call we were told by the Writer that he could not wait on us because he was with a customer. Makes you wonder what the person on the phone was? On the fourth attempt, the customer (me) yelled at the receptionist after being on hold for another three minutes and was promptly placed through to the Writer who made an appointment for an LOF! Can you believe he never mentioned or offered a 15,000 mile maintenance service?
At the request of an existing dealership client E&A did another phone shop survey. This dealer had two full time Appointment Coordinators and the manager felt like they were not doing a very good job, but he needed verification. Boy was he ever right! After several attempts we finally got through to the Appointment Coordinators. You see the problem was, they would take a service call and automatically bounce it out to the Service Writers. In fact, we had to specifically ask for them by name and one of them still bounced our call to a Writer. Needles to say, these ladies had no desire whatsoever to make appointments or sell any additional needed services.
You know what, as much as we would like to believe otherwise, this is still a people business. And, since very few people ever plan to have their vehicle serviced, the majority of people who want to do business with you will call first just to find out how your system works. If they end up in VOICE JAIL or worse end up with I HATE MY JOB WHY ARE YOU BOTHERING ME, your department will suffer the consequences.
Recently, we had one of our clients measure the number of phone calls that came into their Service and Collision Department in one month. This was a medium sized dealership with four Service Consultants and two Estimators. This dealership logged over 5000 incoming calls to these two departments in one month.
- I wonder: how many of those calls were miss-handled?
- I wonder: how many of those potential customers went to some other place because they could not get a suitable answer?
- I wonder: how those six estimators and writers felt after handling over 230 incoming calls each day?
- I wonder: how much training the managers have provided them on how to properly answer incoming calls?
And most of all, I wonder if you know how important incoming calls are to your department's profitability?
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