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Inside this issue
4 Possible Alternatives to the CFPBs BISG Methodology
1 Million FCA Vehicles Under U.S. Investigation for Rollaway Crashes
GM to Temporarily Close 5 Factories as Car Inventory Builds
Car Dealership Gives Man a New Car After His is Tagged with Racist Graffiti
Webinar: Internet Sales Department Best Practices
Year-End LIFO Conformity Reminder
Top 10 Dealership Tax and Assurance Tips for 2016 Year-End
NADA Convention Launches Mobile App
Top Stories
4 Possible Alternatives to the CFPBs BISG Methodology

Republican lawmakers and lenders alike are eager to roll back the Consumer Financial Protection Bureau’s guidelines on disparate impact — given the results of November’s election — but it’s unclear what would replace it, in order to mitigate discrimination in the business, said John C. Redding, partner at Buckley Sandler LLP.

Because the Equal Credit Opportunity Act won’t allow lenders to collect information on race and gender, the much bemoaned Bayesian Improved Surname Geocoding methodology — better know as BISG — tracks borrowers by geography and name to determine whether or not lenders are over charging protected classes. However, a 2014 study, conducted by Charles River Associates, found the disparity alleged by CFPB is not backed up by data, according to the American Financial Services Association (AFSA).

Furthermore, the creator of BISG himself said it was not intended for this purpose, and the CFPB has even acknowledged in internal memos that the methodology runs the risk of overestimating disparity.
Source: Auto Finance News

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1 Million FCA Vehicles Under U.S. Investigation for Rollaway Crashes

The National Highway Traffic Safety Administration is launching an investigation into about 1 million newer Ram pickups and Dodge SUVs after receiving complaints the vehicles rolled away after being parked.

Fiat Chrysler Automobiles today said it is cooperating with the government investigation that covers 2013-16 Ram 1500 pickups and 2014-16 Dodge Durango SUVs. The government said it has reports of 25 crashes from owners alleging vehicles roll away and nine injuries and urged drivers to set the parking brake before exiting the vehicles.
Source: Automotive News

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GM to Temporarily Close 5 Factories as Car Inventory Builds

General Motors will temporarily close five factories next month as it tries to reduce a growing inventory of cars on dealer lots. The factories will close anywhere from one to three weeks due to the ongoing U.S. market shift toward trucks and SUVs, spokeswoman Dayna Hart said Monday. Just over 10,000 workers will be idled.
Source: AP

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Car Dealership Gives Man a New Car After His is Tagged with Racist Graffiti

A man in Arkansas who found his pride and joy broken into and covered in racist graffiti has a new set of wheels, thanks to one generous car dealership. Reshod Johnson left his car parked outside of his place of work for just 15 minutes last week while he retrieved chairs for his son's third birthday party. When he returned, he found his belongings scattered across the street and racist terms spray painted on his car.

Steve Landers Kia saw Johnson's story and decided to help. They donated a new ride to Johnson just in time for Christmas. They said it was the least they could do for a veteran who experienced horrific random hate.
Source: Auto Blog

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Webinar: Internet Sales Department Best Practices
Presented by: Tim Gavin, NADA 20 Group Consultant

Explore effective sales strategies to reach today's internet shoppers. Gavin will review twelve best practices to improve your sales presentation and make the best first impression.

 
Register for this webinar and discover new ways to approach phone calls, response letters and online inquiries.
 
Date:  Wednesday, December 21, 2016
Time: 12:00 p.m. ET
Duration: 30 minutes
Source: NADA

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Year-End LIFO Conformity Reminder

The last-in, first-out (LIFO) inventory method could generate significant tax benefits for dealerships. During times of inflation, this method places a lower value on inventory, allowing dealers to defer taxes and improve cash flow. The tax deferral may be viewed as an interest-free use of cash. The LIFO method has many technical requirements, including the so-called conformity requirement that mandates a taxpayer using the LIFO method for tax also must use the LIFO method for financial (book) accounting.

As year-end approaches, automobile dealers should be careful to verify that all year-end financial statements, including factory dealer statements, are in compliance with IRS LIFO conformity rules and regulations. Failure to comply with the conformity rules could result in the termination of the dealer’s use of the LIFO inventory accounting method for tax purposes and the recapture of the entire LIFO reserve.

A dealership may use the LIFO inventory method only if it has used no method other than the LIFO method for inventorying goods for the purpose of a report or statement covering a taxable year. Dealers who use LIFO should verify that all financial statements – to shareholders, to partners, to other proprietors or beneficiaries, or for credit purposes – report income on the LIFO basis. Normally, a LIFO adjustment should be included at least once a year on factory dealer statements. All statements covering a taxable year, or any other 12-month period, must have the LIFO adjustment. It also is necessary to verify that the income for any short taxable year is calculated on the LIFO basis. A reasonable estimate of the LIFO adjustment is acceptable. The LIFO adjustment should encompass all LIFO inventory (such as new and used vehicles and parts).

An automobile dealer’s financial statements provided to the manufacturer and its credit subsidiary, with which the dealer finances its purchase of new automobiles, are “for credit purposes” because they are issued to a creditor with whom the dealer maintains a continuing credit relationship. On the statements provided to the factory, an automobile dealer must reflect the LIFO adjustment on the income statement for both a current month and the year to date as well as on the balance sheet. Such statements may reflect the income statement adjustment either as an adjustment to cost of goods sold or on the line for other income and expense.
Source: Crowe Horwath LLP

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Top 10 Dealership Tax and Assurance Tips for 2016 Year-End

Is the thought of a chaotic year-end getting you down? Sometimes a simple set of reminders that brings you back to the basics can be the cornerstone to successfully closing your calendar year. We understand and recognize that dealers operate in a world where tax planning and year-end audits or reviews may not appear in their "favorites" list, which is why we are sharing our consolidated "Top 10 List" of tax and audit or review items for you to consider adopting into your year-end process. Click here for the list.
Source: Dixon Hughes Goodman LLP

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NADA Convention Launches Mobile App


 

The new NADA100 mobile app for the 2017 NADA Convention and Expo in New Orleans is now available in the App Store and Google Play. Search for NADA100.

Key features include:

  • Real-time alerts;
  • Workshop and event schedules; 
  • The option to download and email workshop handouts;
  • Locate and schedule meetings with exhibitors; and
  • Rating the workshop sessions.

The NADA convention runs from Thursday, Jan. 26, to Sunday, Jan. 29. The advance online registration discount of $75 for NADA member dealers and their managers ends Jan. 20. For more information or to register, visit www.nadaconvention.org.  
Source: NADA Convention & Expo

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Past Articles
       
      Quotable

      “I think the industry as a whole wants discrimination rooted out. But using this sort of inexact method to guess at whether it’s occurring seems inappropriate.”

       
      -- John C. Redding, partner at Buckley Sandler LLP, commenting on the CFPB’s use of the controversial statistical model known as BISG, Auto Finance News, Dec. 19.
       
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      Dealers Help Consumers Secure Competitive Financing


      Introducing NADA Academy Plus

      NADA Webinars

      Dec. 21--Internet Sales Department Best Practices (12:00 p.m. ET)

      NADA members can view past webinars on-demand at no charge at NADA University Online. Members must create an NADA account before viewing.

      NADA Chairman's Commentary
      The Year at a Glance: A Final Message From Your 2016 Chairman
       
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