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Inside this issue
April 6 Webinar: FTC Update on Court-Ordered Buyback of Certain VW and Audi Vehicles
FTC Finalizes Three More Consent Orders with Dealers Over Certain Used-Vehicle Ads
IRS Notice 2016-66: Potential Pitfall for Dealerships in Captive or Reinsurance Programs
Tax-Writing Chair: Changes Set for Border Tax Plan
White House Seeks to Slash EPA Funds for Emissions Testing
March CPO Sales Just 0.3% Away from All-Time High
Top Stories
April 6 Webinar: FTC Update on Court-Ordered Buyback of Certain VW and Audi Vehicles

The Federal Trade Commission (FTC) will provide NADA members with an update regarding the Volkswagen and Audi diesel buyback provisions, including new developments since the September 2016 NADA and FTC webinar.

Date:  Thursday, April 6, 2017
Time:
  12 p.m. ET
Presented by:
  Jonathan Cohen and Sangioon "Simon" Han, FTC
Duration:
  60 minutes

The webinar will cover ongoing issues affecting dealers and consumers, and what to expect over the coming months. Details of the now-final 2.0-liter diesel settlement and the proposed 3.0-liter diesel settlement are available at VWCourtSettlement.com. The webinar is open to dealers and their representatives. Click here to register.
Source: NADA and FTC

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FTC Finalizes Three More Consent Orders with Dealers Over Certain Used-Vehicle Ads

The Federal Trade Commission has approved three proposed consent orders with auto dealer groups to resolve allegations that they advertised "how rigorously they inspect their used cars" without disclosing that some of the vehicles were subject to open safety recalls. Among other provisions, the consent orders prohibit the dealers from representing – either expressly or by implication – when marketing, advertising, offering for sale, or selling used motor vehicles to consumers that the vehicles are safe, have been repaired for safety issues, or have been subject to a rigorous inspection, unless:

1. The vehicles are not subject to any open safety recalls, or

2. The dealer discloses, in close proximity to such representation, any material qualifying information related to open recalls, including but not limited to:

  • the fact that its used motor vehicles may be subject to recalls for safety issues that have not been repaired, and
  • how consumers can determine whether an individual used motor vehicle is subject to an open recall for safety issues that has not been repaired.

In addition, if the dealer receives a written notice from a manufacturer that a motor vehicle is subject to an open safety recall, the dealer must provide to a consumer – prior to the consummation of the sale of the vehicle – the manufacturer notice or a document that conveys the same information using a substantially similar format. (As an alternative to providing the manufacturer notice, two of the three consent orders permit the dealers to provide to consumers – prior to the consummation of the sale of a used motor vehicle – a written notice that conveys that the vehicle is subject to an open recall that is unrepaired and the safety risks associated with the recall that is made available by the National Highway Traffic Safety Administration (see safercar.gov) or a commercial provider of recall information.)

All of these disclosures and notices must be clear and conspicuous and not otherwise misleading.

These three finalized consent orders follow separate FTC consent orders with similar terms involving General Motors and two dealer groups that were finalized in December 2016. Dealers are advised to review with legal counsel the full terms of these consent orders along with any applicable state law requirements to help assess the legal sufficiency of their used vehicle advertisements.
Source: NADA

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IRS Notice 2016-66: Potential Pitfall for Dealerships in Captive or Reinsurance Programs
By Andy Weill

The Internal Revenue Service has been quite active with regard to perceived abuses in the area of microcaptive insurance. In particular, the IRS promulgated Notice 2016-66 in November 2016, designating certain microcaptive transactions to be “transactions of interest,” mandating certain reporting requirements. Counsel who know that their clients participate in captive or reinsurance programs should be mindful of this new development and advise clients accordingly. Click here for the full article.

Andy Weill is a principal with Weill & Mazer, a leading complex litigation firm in San Francisco. Weill’s practice includes complex business, tax and estate disputes across the nation.
Source: National Association of Dealer Counsel (NADC) Defender

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Tax-Writing Chair: Changes Set for Border Tax Plan

Texas Rep. Kevin Brady, who chairs the House Ways and Means Committee, says he’s listening “very closely” to the import industry’s concerns about the proposed border adjustment tax and foresees “significant modifications” to the plan, such as a transition period. Brady did not elaborate but said Tuesday that the tax-writing panel is looking at how to structure and phase in a border adjustment plan, so it’s “pro-growth” for importers as well.
Source: The Detroit News

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White House Seeks to Slash EPA Funds for Emissions Testing

The Trump administration would nearly eliminate federal funding for the EPA's budget for light-vehicle emissions and fuel-economy testing but will seek to raise fees on the auto industry to pay for some testing, a government document shows. The cuts would slash by more than half the staff of the EPA department that conducts vehicle, engine, and fuel testing to verify emissions standards are met and mileage stickers are accurate.
Source: Reuters

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March CPO Sales Just 0.3% Away from All-Time High

Autodata Corp. determined the industry in March turned the second-highest amount of certified pre-owned vehicles ever. According to information shared with Auto Remarketing, dealers retailed 243,277 CPO units in March, off by just 0.3 percent year over year when the all-time sales record was established. That’s when the industry delivered 243,944 certified models.
Source: Auto Remarketing

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Past Articles:
 
Quotable
"We think imports and exports are equally important to our economy, so I foresee significant modifications in that border equal tax going forward in a really positive way."

    -- Texas Rep. Kevin Brady, who chairs the House Ways and Means Committee, commenting on the border adjustment tax, The Detroit News, April 4

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Automotive Forum -- April 11

 
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