Greetings!
Welcome to the latest installment of IADA's e-news, containing timely updates, information, announcements and reminders. We welcome your suggestions and contributions. For further information and updates regarding the Idaho Automobile Dealers Association please visit our website at www.idahoada.org.
IADA Staff- |
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ECONOMY WATCH
FEDERAL GOVERNMENT
Last week the IADA shared our concerns for the auto industry and the recent banking legislation with Congressman Simpson. Congressman Simpson sits on the House Budget Committee and recently had some questions for Federal Reserve Chairman Mr. Bernanke - and he mentioned talking to our group about the issue.
To see the exchange, click here: http://www.cspan.org/ and click on "Fed Chair. Bernanke on Recovery". Congressman Simpson's questions begin at 42:30.
IDAHO GOVERERNMENT
IADA has begun discussing possible ways to free up local credit for the both floor plans and retail credit needs of our members with the Idaho Banking Association.
With regional N.W. and Idaho banks not having the severe liquidity issues that many of the larger nationals, southern banks, and captive financial institutions are facing our two association are looking for ways to bridge the gap to local Idaho banks who may have traditionally stayed away from auto finance because they traditionally shy away from higher risk business.
Our goal is to try to and identify the issues that these community banks may have and see if we can't find a way to address these concerns and perhaps free up reasonable credit for dealers, for both floor plans and retail loans.
As you are well aware of, with the slow down in residential loan business many community banks are looking for alternative business to make up for this slow down. This might be an opportunity to try to help both auto retailers and local financial institutions.
IADA has also communicated with state government officials to suggest that the Idaho legislature give consideration to lowering the sales tax on the purchase of motor vehicles to stimulate sales in a difficult market. IADA suggested that briefly cutting the tax (Sales Tax Holiday) may result in increased number of transactions that might other wise not occur and thus result in an increase of net sales tax revenue to the state to help reduce a possible deficit. This would help both the state and dealers. IADA did not expect or receive a commitment to do this but officials expressed that the concept was under consideration. IADA will be setting up meetings with key legislative leaders on the JFAC and Finance committees to see if we can't garner support for a sales tax cut.
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RED FLAG RULE "DELAY of ENFORCEMENT"
RED FLAGS RULE COMPLIANCE DATE DELAYED BY FTC; BUT DEALERSHIPS MAY STILL NEED TO BE IN COMPLIANCE BY NOV. 1ST
On October 22, 2008, the Federal Trade Commission (FTC) announced that it will delay enforcement of the Red Flags Rule until May 1, 2009. The FTC along with various other federal agencies announced the Red Flags Rule in November, 2007, and while it was effective as of January 1, 2008, a mandatory compliance of November 1, 2008 was established by all agencies.
The FTC's announcement notes that their delay does "not affect other federal agencies' enforcement of the original November 1, 2008 deadline for institutions subject to their oversight to be in compliance." To date, the other agencies responsible for enforcing Red Flags-Federal Reserve Board, National Credit Union Administration, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and the Office of Thrift Supervision-have not announced a similar six-month delay. Because of the provisions in the Red Flags rule regarding the responsibility to "oversee service provider arrangements effectively and appropriately," dealerships doing business with any of the other institutions subject to the jurisdiction of other agencies who do not delay their mandatory compliance date may still be asked to sign contracts or agreements to affirm they are in compliance. Since the primary reason the FTC stated for delaying implementation was because various entities not typically covered by the FTC were confused over whether they were covered, it is uncertain if the same areas of confusion are at issue at all with the other agencies.
For this reasons, dealerships are still advised to begin complying with the Red Flags rule and implement their programs by November 1st. Aside from the reasons above, this will also provide an interim period in which to "try out" your plan, address any areas of confusion, and ensure employees are fully trained before the real mandatory compliance date.
DISCLAIMER: IADA is not authorized to dispense legal advice.
The information contained in this weekly email is intended to provide important updates and reminders regarding statutes, litigation, and regulations. IADA always advises that dealers should consult legal counsel on the specifics of any laws or regulations to ensure proper compliance.
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AUTOMOTIVE NEWS AT A GLANCE
Listed here are several articles pertaining to the auto industry that appeared recently in newspapers and other media outlets across the nation.
Shares of Volkswagen rocket on Porsche plans
The Detroit News, October 27
Shares of Volkswagen AG soared nearly 80 percent on Monday, bolstered by Porsche's announcement of plans to lift its stake in the automaker to 75 percent by 2009.
Porsche's Owners Will Support VW Purchase
The Wall Street Journal, October 25
Porsche Automobile Holding SE said Friday the rift between its owners, the Pich and Porsche families, has been resolved, and both families now fully support Porsche Chief Executive Wendelin Wiedeking's plan to take over Volkswagen AG.
GM says no timetable for Chrysler deal
The Detroit News, October 27
General Motors Corp. Vice Chairman Bob Lutz said this morning there is no timetable to strike a deal to acquire rival Chrysler LLC and he declined to address most other questions about a potential deal between the two Detroit auto companies.
Chrysler, GM deal confronts obstacles
The Detroit News, October 20
Federal regulators, dealers and UAW could try to delay or prevent merger of Detroit rivals.
Michigan Sweats GM-Chrysler Talks
The Wall Street Journal, October 20
A merger of General Motors Corp. and Chrysler LLC would land a heavy economic blow on Michigan, a state already battered by waves of home foreclosures and the loss of tens of thousands of auto-industry jobs over the last few years.
Merger can get GM cash, leverage with UAW, analyst says
Detroit Free Press, October 20
General Motors Corp. could access the cash it needs and negotiate more labor savings with the UAW by completing a merger with Chrysler LLC, a JP Morgan auto analyst said today.
Are These Detroit's Darkest Days?
The Wall Street Journal, October 27
David Patton and Mathew Passy discuss whether these are the darkest months for the Detroit Three auto makers.
Station Owners Welcome Cheaper Gas
The Wall Street Journal, October 23
Gas prices have dropped by almost 90 cents at the pump the past month to a U.S. average of $2.858 for a regular gallon on Wednesday, according to auto group AAA.
IADA forwards news articles and opinion columns of interest through THE TRAFFIC REPORT to inform members of current events. These in no way reflect the views, opinions, and/or positions of IADA or its member dealers. They are sent for informational and educational purposes only.
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The October 2008 Idaho Outlook is now available on the Division of Financial Management's website.
CLICK HERE
PROTECT YOUR ASSETS!
Do you want to know how automobile dealers can legally save up to 40% in income taxes each year? Eliminate the capital gains tax on the sale of a business, real estate or other assets. Do you know the tools available to you to make it possible to pass assets on to your heir's tax free? Are you properly protecting your dealership from lawsuits?
On February 11th the IADA will host a symposium by one of America's top asset protection experts, Larry Oxenham. Learn how to protect your business from lawsuits, reduce taxes and learn new estate planning strategies most advisors are not aware of.
Complete information and a registration form will be coming to your business soon. Do not miss the opportunity to achieve financial peace of mind!
Call Coleene Sutton at 208 853-4668 for more information.
NADA NEWS
NADA recently recognized 20 dealerships that took part in the NADA Energy Star Challenge and cut electricity or natural-gas consumption at their stores by at least 10 percent since January 2007. Three dealers received gold-level status by cutting their energy use 30 percent or more: George Haddad, Haddad Toyota, Pittsfield, Mass.; Jim Hand, Hand Motors, Manchester Center, Vt.; and John Lambert, Lambert Auto Sales, Claremont, N.H. (Hand and Lambert were also among the 13 winners of the 2008 Energy Star Small Business and Congregation Awards-announced by EPA on Sept. 16.) In addition to the gold level, NADA recognizes a silver level for dealers who cut energy 20 to 29 percent, and bronze, for those who cut energy 10 to 19 percent. For more, visit www.nada.org/energystar.
2009 NADA CONVENTION & EXPO
January 24-27, New Orleans, LA
Registration is now open for the 2009 NADA Convention, themed "Voice of the Dealer...Committed to Community." IADA reminds dealers that convention registration is required before reserving a hotel room. Since hotel rooms fill quickly during the convention, it is recommended that dealers register for the event early to ensure they are able to reserve a room at the hotel they desire.
Also,
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2009 in New Orleans | In recognition of tough economic times, registration fees and hotel rates have remained unchanged, and discounted airfare is available. More than 700 exhibitors, 150 dealer workshops, a heavy-weight lineup of speakers and an additional half-day of workshops, including "Lifeline to Profit$ (offered both Friday and Tuesday), are slated for the NADA convention.
Additional details, including registration instructions and hotel details, are available on NADA's Web site at www.nada.org/convention
NADA-TV: New Orleans Is Back!
(Windows Media Dial-up | Broadband)
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LEGISLATIVE & REGULATORY UPDATES
Since 2005, NHTSA has required light-duty vehicle manufacturers to attach standardized TREAD Act Tire Labels on the pillar behind the driver's door or on the driver's door. These labels must specify a vehicle's tire size and cold inflation pressure and its capacity weight rating. A vehicle's capacity weight rating essentially is its gross vehicle weight minus its curb weight. Note that these labels only allow for the listing of one tire option for front, rear and spare.
In December 2007, NHTSA issued a clarification to its tire label rules.
- Dealerships replacing tires on new vehicles before first sale must re-label if those tires have a size or cold inflation pressure different from the original.
- Dealerships adding parts or accessories to a vehicle before first sale must re-label if those add-ons exceed the lesser of 100 lb. or 1.5 percent of the vehicle's gross vehicle weight rating.
- Dealerships may use any reasonable means to determine the accurate weight of any add-ons, including scales or reference to their shipping weight.
- Exceptions:
- Re-labeling is not required when changes result in a new vehicle's gross weight rating being reduced or for changes made to used vehicles.
Dealers can re-label in one of three ways:
1. Place a new label with new information on top of the existing label.
2. Modify the existing label with the new tire or weight information.
3. For weight changes only, place a supplementary label adjacent to
the original tire label.
Replacement placards linked to the above are available from OEMs, form companies, aftermarket parts and equipment suppliers and through the National Truck and Equipment Association and the Specialty Equipment Market Association.
Additional Clarifications / Changes Being Sought: Note also that NADA is awaiting NHTSA decisions on whether or not:
1. Relabeling only is necessary for altered light-duty vehicles (those to which major changes are made).
2. To set the relabeling trigger threshold at the greater of 3 percent of GVWR or 220 lbs.3. To eliminate relabeling for tire changes. NADA urged NHTSA to recognize that tire changes made before first sale typically involve size options recommended by the vehicle's OEM, are at the request of purchasers, and involve no significant safety concerns.
NADA'S REGULATORY REVIEW NOW AVAILABLE ONLINE
NADA's Regulatory Review, which is published quarterly by the NADA Public and Legal Affairs Groups, contains the latest federal regulatory developments that affect franchised new-vehicle dealers. Regulatory Review is now available on NADA's Web site atwww.nada.org, under "Publications" (member login required). | |
LET US KNOW ABOUT YOUR ACCOMPLISHMENTS!
Have you or anyone else at your dealership won an award recently? Has your dealership provided any outstanding community service? We want to recognize such accomplishments. Please send us a brief write-up of the award or event along with any other information to info@idahoada.org. Also include your contact information for further follow-up.
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Mission statement: The Idaho Automobile Dealers Association was formed in 1932 to represent interests of new vehicle dealers in the state. Our goal then and now has been to improve, enhance, and grow the automobile industry in Idaho. By advocating and providing programs, products and services for new car dealers, we want to create a stable and healthy retail market for Idaho's businesses and consumers.
Sincerely,
Trent Wright
Idaho Automobile Dealers Association |
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Generously Underwritten by:
IADA's First Choice in P & C Insurance! |
UPCOMING EVENTS:
Elections
Nov. 4th
SEMA Dealer Day, Wednesday, November 5, Las Vegas Convention Center, Las Vegas, NV.
December 8th
IADA Board Meeting Boise
NADA
Convention, January 24-27, 2009, New Orleans, LA. |
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