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Inside this issue
U.S. Auto Sales Seen as Best Since 2007 on Low Financing
Editorial: Obamacare is Real; It's Time Dealers Made Plans
NADA Offers Advice to Dealers on Healthcare Reform
ObamaCare and the '29ers'
New Cars Increasingly Out of Reach for Many Americans
Marchionne Would Prefer to Merge Chrysler Privately
IRS Expands Voluntary Worker Classification Settlement Program
Your Car Is the Next Smartphone Accessory
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
U.S. Auto Sales Seen as Best Since 2007 on Low Financing

New car buyers, shunned by lenders just four years ago, now are benefiting from historically low interest rates and more-available credit, pacing a U.S. auto market that is hovering near pre-recession levels. “The availability of consumer credit is plentiful,” [Kurt McNeil, General Motors Co. vice president of U.S. sales operations] said this month in an interview at the National Automobile Dealers Association convention in Orlando. “More lenders are interested in getting back into various elements of our business. That just fuels opportunity.”
Source: Bloomberg

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Editorial: Obamacare is Real; It's Time Dealers Made Plans

Click here for an editorial from Automotive News on Obamacare.

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NADA Offers Advice to Dealers on Healthcare Reform

With the important Jan. 1, 2014 deadline approaching, implementation of the health care reform law is close to top of mind for most dealerships. NADA has held a number of webinars and other seminars on health care reform which remain available through NADA University. However, complying with the law will depend on an individual dealer's specific circumstances. “Unfortunately, there isn't a simple checklist of what a dealer has to do to comply with the Affordable Care Act,” says Andy Koblenz, NADA's General Counsel and head of Regulatory Affairs. Accordingly, dealers should seek expert advice from their insurance brokers, providers and other outside experts to ensure that their decisions about health care make sense for their employees under the new rules. Additional resources may be available from state and metro dealership associations and downloadable from www.nadauniversity.com. If you need assistance finding the resources within NADA University, call (800) 557-6232. General information including a timeline of implementation can be found at the U.S. Department of Health and Human Services website: http://www.healthcare.gov/law/timeline.
Source: NADA Regulatory Affairs

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ObamaCare and the '29ers'

Here's a trend you'll be reading more about: part-time "job sharing," not only within firms but across different businesses. It's already happening across the country at fast-food restaurants, as employers try to avoid being punished by the Affordable Care Act. Welcome to the strange new world of small-business hiring under ObamaCare. The law requires firms with 50 or more "full-time equivalent workers" to offer health plans to employees who work more than 30 hours a week. (The law says "equivalent" because two 15 hour a week workers equal one full-time worker.) Employers that pass the 50-employee threshold and don't offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees. So by hiring the 50th worker, the firm pays a penalty on the previous 20 as well. These employment cliffs are especially perverse economic incentives. Thousands of employers will face a $40,000 penalty if they dare expand and hire a 50th worker. The law is effectively a $2,000 tax on each additional hire after that, so to move to 60 workers costs $60,000. A 2011 Hudson Institute study estimates that this insurance mandate will cost the franchise industry $6.4 billion and put 3.2 million jobs "at risk."
Source: The Wall Street Journal

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New Cars Increasingly Out of Reach for Many Americans

Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city actually can afford the typical new vehicle. The typical new vehicle is now more expensive than ever .... According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments, the median income there running $86,680 a year. At the other extreme, Tampa, Fla., was at the bottom of the 25 large cities included in the study, with a median household income of $43,832. Affordability has been a matter of growing concern for the auto industry in recent years as prices have continued to move upward. Even the most basic of today's cars are generally loaded with features that were once found on high-line models a few decades back - if they were available at all - such as air conditioning, power windows, airbags and electronic stability control, as well as digital infotainment systems. They also have to meet ever tougher federal safety, emissions and mileage standards that have added thousands to the typical price tag.
Source: CNBC

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Marchionne Would Prefer to Merge Chrysler Privately

CEO Sergio Marchionne would prefer to complete the marriage of Fiat and Chrysler without issuing Chrysler shares to the public, but whether he can convince Chrysler's other shareholder is not clear. Fiat owns 58.5% of Chrysler. The UAW's Retiree Medical Benefits Trust owns the other 41.5%. Acquiring all of the trust's shares would likely cost Fiat several billion dollars. The Italian automaker has offered to buy another 6.6%, but the two sides disagree over the price of those Chrysler shares.
Source: Detroit Free Press

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IRS Expands Voluntary Worker Classification Settlement Program

The IRS announced that it is expanding the Voluntary Classification Settlement Program (VCSP) that provides partial relief from federal employment taxes for eligible taxpayers that agree to voluntarily reclassify certain of their workers as employees for future tax periods for employment tax purposes. The VCSP allows taxpayers to pay a portion of the tax that would have been owed if the workers were properly classified, and to avoid penalties and surcharges. The IRS has announced that the VCSP has been extended to June 30, 2013, and expanded so that more taxpayers are now eligible for the program. For more information from the IRS, click here for Frequently Asked Questions and a Bulletin.
Source: NADA Regulatory Affairs

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Your Car Is the Next Smartphone Accessory

Automobile giants at the world's biggest mobile fair are showing off a new technology that turns a car into a smartphone accessory, allowing a driver to use cutting-edge apps without veering off the road. Called MirrorLink, and adopted by 85 big manufacturers from Ford to General Motors, Chrysler, Nissan, Honda, Hyundai, BMW, VW, Fiat or Renault, it connects a smartphone and car entertainment system with a two-way audio, video and data link.
Source: Discovery News

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Quotable
"My preference is to create one single company. We belong together. I've been working on this for four years. I just want to bring it home."

    -- Fiat CEO Sergio Marchionne, commenting on plans to merge Chrysler and Fiat as one company, Detroit Free Press, March 1

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