| |
|
|
2011 IADA OFFICERS
Chairman
Tim Mooney
Tim Mooney, Inc.
Tuscola
Vice Chairman
Jim Lombardi
Lombardi Chev Buick
Wilmington
Treasurer
Gary Knight
Carmack Car Capitol
Danville
Secretary
Mike Mangold
Mangold Ford
Eureka
|
|
| |
|
|
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)
|
|
|
February 16, 2011 Vol 2011, Issue 2
| |
IADA CONGRATULATES MIKE MURPHY ON HIS NATIONAL RECOGNITION FOR COMMUNITY SERVICE AND INDUSTRY ACCOMPLISHMENTS AT NADA CONVENTION
|
|
| |
.jpg) Mike Murphy, President/Owner of Mike Murphy Ford, Morton, Illinois, was honored for his nomination for the 2011 TIME Dealer of the Year award. Murphy was one of a select group of dealers from across the country honored at the 94th Annual National Automobile Dealers Association (NADA) Convention & Exposition in San Francisco.
The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted awards for new-car dealers. Recipients are among the nation’s most successful auto dealers, but they must also demonstrate a long-standing commitment to effective community service.
Murphy was chosen to represent the Illinois Automobile Dealers Association in the national competition--one of only 52 automobile dealers, from 17,000 nationwide, nominated for the 42nd annual award. The award is sponsored by TIME in association with Goodyear, and in cooperation with NADA.
In the area of community service, Murphy has a long and distinguished record. Over the course of his career, he’s dedicated time, talent and resources to many civic and charitable enterprises, including: the Morton Chamber of Commerce, serving six years on the board and a term as president; the Morton Community Foundation, serving on the board for three years, a term which began in 2010; hosting a ’50’s night for the Foundation in June 2010 that raised $37,000; and eight years, from 2001-’09, on the board of We Care (a food pantry, meals-on-wheels and transportation provide for the elderly of Tazewell County. Murphy has also been a member of the Rotary Club for the past 26 years, including a two-year stretch on the board. He also furnishes vans and drivers for foreign exchange student trips.
In 2006, Murphy received the Morton Distinguished Citizen Award, given by the Chamber of Commerce for outstanding service and contributions to the community. He’s also been recognized by the Rotary Club as both a Paul Harris Fellow and with the Herbert Taylor Award.
|
|
|
Top
|
| |
ILLINOIS LEGISLATURE TO RETURN TO SPRINGFIELD
|
|
| |
After cancelling Session a week ago due to the weather, the General Assembly returned to Springfield last week for what most believe will be a session focused on budget cuts and a new way of prioritizing state spending. Speaker Madigan has told House members that additional pension reforms must stay in the mix, and that legislators are going to be making some very unpopular decisions. Meanwhile, the House and Senate already have introduced more than 3,300 bills. IADA Staff has been busy reviewing bills and contacting legislators on those that pose a serious threat to our industry. Right now, much of our time is being spent behind the scenes to prevent many adverse bills from seeing the light of day.
|
|
|
Top
|
| |
IADA/CATA CONFERENCE DEADLINE APPROACHES
|
|
| |
.jpg) February 24th is our deadline to release rooms from our room block at the Marriott Marco Island Resort & Spa. If you still want to join us please contact our office immediately so we can reserve a room for you!
An excellent Schedule of Events is being planned for our spring get away to the Marriott Marco Island Resort & Spa, Marco Island, Florida, March 26-30, 2011. Register today and get away from the Illinois winter blues. Join us on this beautiful island known for its inspirational sunsets. Marco Island provides the perfect location to spend time with your family while meeting and networking with your fellow dealers. An IADA/CATA Golf Tournament is scheduled along with other social activities.
To join us for an outstanding meeting, click here to view a conference registration and sign up today!
|
|
|
Top
|
| |
IADA MEETS WITH ATTORNEY GENERAL'S AUTOMOBILE DEALER ADVISORY COUNCIL
|
|
| |
IADA met with representatives from the Attorney General’s Office, the Better Business Bureau, and the Chicago Automobile Trade Association to discuss recent advertising rule enforcement actions and common violations of the advertising rules. The most common of these violations include:
- Failure to Return Down Payment when financing is not approved. If you spot deliver a vehicle and the customer returns the vehicle because he or she was unable to obtain financing, then you must refund the entire down payment. Retaining a portion of the down payment is a violation of Section 2C of the Consumer Fraud and Deceptive Business Practices Act. (815 ILCS 505/2C).
- Selling Price in Excess of Advertised Price. You cannot sell a vehicle at a price that exceeds your lowest advertised price. For example, if you advertise a vehicle on the internet for $24,500 and in the newspaper for $24,900, then you cannot for more than $24,500. This applies even if your customer saw the newspaper advertisement but not the internet advertisement. Please make sure that you take steps to make sure that your print and internet offers are identical. (475.310).
- Sale of Vehicle without Title. Section 3-115 of the Illinois Vehicle Code prohibits dealers from selling vehicles before obtaining the titles to those vehicles. (625 ILCS 5/3-115).
- Fake Auction. A dealer was recently cited for advertising and conducting what was purported to be a used vehicle auction. However, the dealer did not disclose the fact that each of the vehicles in the sale had a reserve price that had to be met before the sale would go through. The dealer started the “bidding” at a level that was well below the reserve prices. (475.210)
- Limited Availability. A dealer was recently cited for advertising a very low price point on used vehicles, but failing to disclose that the low prices applied only to a very small number of vehicles. The advertisement made it appear that the low price applied to all used vehicle inventory. (475.210; 475.320).
- Range problems. Several dealers have advertised only the more favorable end of the price range. You cannot advertise that a certain model is available for “as low as” of “from” a certain range without also stating the high end of the price range. 475.390
- Free gifts. The Attorney General’s Office said that it frequently sees violations of the free gift rule. You cannot offer a free gift in connection with the purchase or lease of a vehicle. This prohibition includes a ban against offering free oil changes as an incentive to purchase a vehicle.
- Coupons. The consumer Fraud and Deceptive Business Practices Act prohibits the use of coupons in connection with any retail sale of a vehicle. Please note that this prohibition applies to internet coupons and to Illinois print publications that advertise coupons for out-of-state dealers. (815 ICLS 505/2J.1).
- Guaranteed Trade-In Values. Dealers cannot guarantee that they will pay a minimum price for trade-in vehicles. (475.540).
- Fake Repossessed Vehicle Sale. A dealer advertised a used vehicle sale that was purported to feature repossessed vehicles when the vehicles were actually the dealer’s regular used vehicle inventory. This is considered a deceptive act in violation of the Consumer Fraud and Deceptive Business Practices Act and the advertising rules. (815 ILCS 505/2; 475.210).
- Clearance Sales. The advertising rules prohibit advertising a clearance sale unless the model can no longer be ordered from the manufacturer. If your manufacturer runs a year-end clearance event for a vehicle, while it is still manufacturing the vehicle, then advertising the event is a violation of the advertising rules. (475.370).
- Tax Rebates and Refund Anticipation Loans. If you offer free income tax preparation services at your dealership and advertise that the customer can use his or her tax refund for a down payment, you must make sure that the tax preparer delivers the customer’s tax refund and not a refund anticipation loan. If the tax preparer provides a refund anticipation loan, which is often significantly smaller that a tax refund, then you must disclose it as a refund anticipation loan. (815 ILCS 505/2; 475.210). Also, you cannot limit an offer of free tax preparation only to customers who purchase vehicles and you cannot offer to match or double a customer’s tax refund, because those offers would violate the free gift rule. (475.590).
- Recovery Fund/Bond. The Attorney General’s Office also discussed problems it has seen when a customer trades in a vehicle that has a lien on it to a dealer who fails to pay off the lien as agreed with the customer. This happens most frequently when a dealer goes out of business shortly after accepting the trade-in. Whenever this happens, however, the customer is surprised with a debt that he or she often does not become aware of until his or her credit rating has been seriously damaged. The Attorney General’s Office indicated that it intends to introduce legislation to solve this problem. One option the Attorney General’s Office suggested would require dealers to post a bond to cover any unpaid liens. Another option would require dealers to pay into a recovery fund for the benefit of customers who are financially harmed when a dealer fails to pay off the customers’ liens. At this time, IADA has not seen the Attorney General’s proposed legislation. When we do, we will share the details with you.
|
|
|
Top
|
| |
IADA MEETS WITH ILLINOIS DEPARTMENT OF REVENUE
|
|
| |
IADA met with representatives from the Illinois Department of Revenue and the Chicago Automobile Trade Association to discuss sales tax issues that impact dealers. Among the items discussed were the following:
- Good-will repairs. Under the current administrative rule concerning good-will repairs, a dealer who performs a good-will repair is considered the user of any parts that are used in the course of the good will repair and must pay Use Tax on those parts. (In the case of a good-will repair, the dealer owes Use Tax based on the dealer’s cost price of the parts, not on their retail price). The rule applies to all good-will repairs, regardless of whether the dealer performs them pursuant to an order from his or her manufacturer (accompanied by reimbursement from the manufacturer) or on his or her own volition. However, the Department of Revenue indicated that it may review the rule as it relates to manufacturer-ordered and reimbursed good-will repairs. The bottom line is that you must pay Use Tax on all parts that are used as part of a good-will repair. If the Department of Revenue indicates any interest in modifying the rule, IADA will update you. (140.141). http://www.ilga.gov/commission/jcar/admincode/086/086001400A01410R.html
- Trade-ins. The administrative rule concerning the valuation of trade-in credits provides that a customer’s trade-in credit must be reduced by the value of any cash back that the dealer pays to the customer. However, if the customer’s trade-in has a lien on it and the dealer pays off the lien, the trade-in credit is not reduced by the amount of the lien payoff. The Department of Revenue has indicated that they will review this rule. If Revenue indicates that it will consider changing this rule, IADA will let you know. Meanwhile, please make sure that you value trade-in credits properly. (130.455).
http://www.ilga.gov/commission/jcar/admincode/086/086001300D04550R.html
- Lease Customers from Retaliatory States. The Retailers Occupation Tax Act requires Illinois dealers to collect sales tax when they sell vehicles to customers who reside in retaliatory states. The Illinois Department of Revenue maintains a list of those states. (http://tax.illinois.gov/Publications/Sales/rntrrc/ST-58.pdf). However, if you lease a vehicle to a customer who resides in a retaliatory state, you should not collect sales tax. Rather, if you lease a vehicle to an Indiana resident, for example, you should check box 5 F (Other) and write “IN Lease Customer” on the corresponding line.
|
|
|
Top
|
| |
CHICAGO AUTO SHOW UNDERWAY
|
|
| |
The Chicago Auto Show began Feb. 11 with its frontrunner stature as North America's largest auto show, and kicked-off with the First Look for Charity Event which since its inception in 1992, the Chicago Auto Show’s benevolent event has raised $28.4 million for numerous Chicago area charities.
First Look for Charity gives attendees an elegant, inaugural look at the annual Chicago Auto Show; a method to help 18 deserving charities; and an opportunity to win two new vehicles -- a 2011 Honda CR-Z and a 2011 Hyundai Sonata Turbo.
- By the way, make sure you sign up for Twitter (@Chicago Auto Show) and click the “like icon at the www.facebook.com/ChicagoAutoShow Official Facebook Fan Page. It’s great for up to the minute information on appearance dates and times, special promotion and contests.
- The show’s all new Web Site, www.ChicagoAutoShow.com, has everything from basic show information about tickets, parking hours, mass transportation, history and vehicles on display, to a photo gallery of new and old cars that’s second to none.
Our congratulations to CATA for another great Auto Show which promotes our industry, benefits many charities in the Chicago Area along with kicking-off the spring selling season! |
|
|
Top
|
| |
LINDENWOOD UNIVERSITY TO RECOGNIZE ALAN J. DIXON
|
|
| |
Lindenwood University in Belleville has announced plans to name the school’s new student center after former Senator Alan J. Dixon. The building will be remodeled and will include a museum showcase of Dixon’s 43 years of public service to the State of Illinois and his many political accomplishments. As many of you know, Dixon also served as Illinois Secretary of State. Alan was always a strong supporter of Illinois’ franchised dealers. Dixon’s family is seeking donations for the project. Donations may be sent to Lindenwood University – Belleville; Senator Alan J. Dixon Center, 2600 West Main Street, Belleville, IL 62226 or go to www.lindenwood.edu/alumni/donations.cfm for more information.
|
|
|
Top
|
| |
CONGRESS UPDATE ON 1099 REPORTING REQUIREMENTS FOR 2012
|
|
| |
Legislation repealing burdensome new Form 1099 reporting requirements for businesses and associations should be on the House floor “in relatively short order,” according to House Majority Leader Eric Cantor (R-VA).
House Ways and Means Committee Chairman Dave Camp (R-MI) told POLITICO that he is finalizing a 1099 repeal bill that would be fully paid for and would closely resemble the repeal language attached to the Senate’s FAA reauthorization bill last week. Camp said Ways and Means would likely take up the legislation within a few weeks.
Members of the House Small Business Committee this week also showed support for repealing the expanded 1099 reporting requirements, which are scheduled to take effect in 2012. In a committee hearing Feb. 9, House Small Business Committee Chairman Sam Graves (R-MO) said Congress needs to repeal the requirement immediately so that small businesses and tax-exempt organizations don’t have to begin devoting resources to compliance.
|
|
|
Top
|
| |
NEW SBA DEALER FLOOR PLAN PILOT PROGRAM ANNOUNCED
|
|
| |
After working hand-in-glove with NADA and at lightning speed for the past five months, the Small Business Administration today announced a new dealer floor plan program (DFP). Last year's Small Business Jobs Act established the framework for the new program. The old program ended at the end of last September. Key features include:
1. Structured to encourage SBA lenders to extend lines of credit to eligible dealers of new and used automobiles, motorcycles, boats (including boat trailers), recreational vehicles and manufactured housing (mobile homes).
2. Dealers can apply if they meet either the 200-employee test or the alternative $15 million net worth/$5 million net income test.
3. Minimum Loan Size: $500,000 Maximum Loan Size: $5,000,000
4. SBA will guarantee 75 percent on floor plan lines of credit when the lender advances no more than 100 percent of the cost (invoiced) for new inventory, and 100 percent of the cost or industry based wholesale book value, whichever is less, for used inventory.
5. Loan proceeds may be used for the acquisition of titleable inventory for retail sales, to refinance existing floor plan lines of credit with another lender, or to refinance/replace existing floor plan lines of credit with the participating lender. Proceeds may also be used to pay the SBA guaranty fee.
6. Floor plan lenders with at least $1 billion of floor plan lines of credit may qualify for an expedited the loan approval process. Delegated floor plan lenders can use SBA Express forms and to the maximum extent practicable, their own policies, procedures, internal controls and documentation. Non-delegated lenders will follow standard 7(a) procedures, including the documentation requirements.
The DFP Pilot will be implemented on or before Feb. 9, 2011. NADA will work closely with SBA and lenders to help ensure a successful implementation of the program.
For more information, refer to the SBA’s press release and fact sheet. This information is provided by the NADA Regulatory Affairs Committee.
For a list of participating lenders, you can contact the SBA’s Illinois regional office at:
http://www.sba.gov/about-offices-content/2/3161 |
|
|
Top
|
| |
NADA/ATD SUBMIT COMMENTS ON PROPOSED TRUCK FUEL EFFICIENCY STANDARDS
|
|
| |
ATD submitted formal comments to the Environmental Protection Agency and Department of Transportation regarding the agencies' proposal to implement the first-ever fuel efficiency and greenhouse gas (GHG) emissions standards for commercial vehicles. ATD Chairman Kyle Treadway also testified on the proposal in Chicago last year. In its letter to the regulators, ATD makes the following points:
- Any new fuel efficiency rules for commercial trucks must be "appropriate, cost-effective and technologically feasible." Unless these criteria are met, ATD argues, "prospective customers will avoid purchasing new vehicles and engines, electing instead to hold onto existing ones longer or to turn to the used marketplace, either way leaving dealerships with expensive unsold inventory and undermining the livelihood of dealership employees."
- The rules must be implemented as a single, national fuel-economy program. "Avoiding a patchwork of state laws related to fuel economy is critical to the dealerships that sell new vehicles and engines to the for-hire carriers, private companies, public fleets, and individuals who operate trucks and engines in every state in the nation," states Doug Greenhaus, NADA director of Environment, Health and Safety, in the letter to the EPA and DOT.
- The proposed rules must not put dealerships in the position of having to purchase vehicles that don't sell. First and foremost, fuel efficiency mandates must allow for the manufacture of vehicles that meet customers' practical needs, ATD argues. "Every vehicle potentially covered by the proposal has a work purpose that must be met through the design, specification, and ordering, and manufacture process. And every customer’s needs are different," Greenhaus states in the letter.
ATD is urging regulators to seek fuel-efficiency standards resulting in improvements that commercial fleets and businesses will want to buy at prices they can afford. "Otherwise, truck dealerships, their employees, and the economy will suffer, without commensurate environmental or national security benefits," Greenhaus says.
Source: NADA/ATD Regulatory Affairs |
|
|
Top
|
| |
FRAUD ALERT
|
|
| |
NADA is warning dealers to be on the lookout for possible fraudulent activity related to dealers' retail loan portfolios. Certain individuals have recently targeted dealers with a scam involving a promise to “bundle a dealership’s car loans and market them to investors," essentially selling the car dealers’ collectible debt. The individuals then require dealers to pay car buyers’ first two to three months’ payments up front. These individuals collect the fees, but never market the loans. One such group of individuals in Washington State was recently sentenced in federal court for their role in such a scheme. This group operated under several names including Auto Credit Solutions, Sub-Prime Financial Services, Easy Credit Store, Instant Funding Systems, Great Northwest Financial Services and Western Empire Financial Services. Dealers are encouraged to be diligent in selecting business partners, and if a dealer suspects such fraud is being attempted, they should contact the Internal Revenue Service Criminal Investigation, U.S. Postal Inspection Service or their local police department.
Source: IRS/NADA Legal Affairs |
|
|
Top
|
| |
OUR IADA PARTNER - ZURICH
|
|
| |
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.
Click here for to view their monthly Loss Prevention Bulletin – this month, Prevent Discrimination in the workplace |
|
|
Top
|
|
