View Web Version

SPONSORED BY
NADA.org
December 4, 2017 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Senate Tax Reform Bill Passes with 100% Floor Plan Deductibility Preserved
What We Found in the New Senate Tax Bill
Honda, Ford Sales Rise; Toyota, FCA, Hyundai-Kia, GM Dip
Why the Market Isn't Sweating the Decline in U.S. Auto Sales
Recall Process Still Waiting for Repair
Dec. 5 Webinar: The Dealership and the Connected Car
Dallas Auto Dealer Settles Charges it Deceptively Advertised Sale and Lease Terms
NADA Show 2018: New Distinguished Speaker Series
Top Stories
Senate Tax Reform Bill Passes with 100% Floor Plan Deductibility Preserved

Early Saturday morning, the Senate passed the "Tax Cuts and Jobs Act," (H.R. 1) which included a NADA-supported amendment to preserve 100 percent deductibility of interest on floor plan loans (a specialized loan that funds vehicle inventory).  This amendment, offered by Sen. Rand Paul (R-Ky.), was the top priority for NADA in the Senate tax reform bill.


U.S. Sen. Rand Paul (R-Ky.), the lead sponsor of the floor plan financing amendment, speaks at NADA’s Washington Conference in 2015.
(Photo: NADA)  

The Senate Finance Committee bill reported out of committee would have reduced the current 100 percent deduction of floor plan interest to 30 percent of adjusted taxable income, and treated dealerships, generally closely-held small businesses, the same as large corporations.

The Senate tax bill recognizes that floor plan loans used to finance high-cost inventory such as vehicles, boats, farm equipment, etc., are different.  The Committee version had inadvertently put small business dealers with high-cost inventory at risk of paying higher taxes, even when the dealership does not show a profit.  If the business interest limitation policy had been in place during the Great Recession, it is likely many more small business dealers would have gone out of business.

Senator Paul’s leadership on this issue was critical to ensuring that 100 percent floor plan deductibility was included in the tax bill.  Other Senators, who also fought hard to ensure the Paul amendment was added to the bill, included Sens. John Kennedy (R-La.), Bill Cassidy (R-La.), Todd Young, (R-Ind.), Jim Risch (R-Idaho), John Thune (R-S.D.) and John Hoeven (R-N.D.).  Please take a moment to thank these Senators, and others you contacted, to make sure they know we greatly appreciate their efforts.

NADA is pleased the Senate bill was corrected to allow full deductibility of interest on specialized floor plan loans. Preserving the full deductibility of floor plan interest will help preserve auto sales, jobs and tax revenue for state and local governments.

With the Senate rushing to pass a major tax overhaul, ensuring that floor plan financing remained fully deductible was a major challenge.  However, dealers across America once again rose to the occasion and generated a strong and sustained grassroots involvement needed to prevail on this important issue. 
 
Both the House and Senate tax reform bills include nearly identical floor plan interest deductibility provisions.  These bills will soon be considered by a House-Senate conference committee to reconcile their differences before both houses of Congress vote on final passage.  NADA will keep dealers advised of any developments.

NADA thanks its members for helping ensure the Paul amendment was included in H.R. 1.  If you have any questions, please contact the NADA Legislative staff at 202.547.5500.
Source: NADA

[back to top]

What We Found in the New Senate Tax Bill

In the early hours of Saturday morning, Senate Republicans passed their version of a sweeping tax overhaul ...

As we read through it, we focused on the bill’s last-minute changes. Here’s what stood out to us in our initial look ...

Car Dealers – The latest version restores a 100 percent deduction on something called “motor vehicle floor price financing”. Turns out this is actually a significant part of how cars are sold. Car dealers use loans to buy their inventory, the cars that sit on their lots. Currently they can deduct all the interest they pay on those rather large loans. The original Senate bill had cut that deduction to just 30 percent of the interest. But car dealers and Sen. Rand Paul, R-Kentucky, made a lot of (figurative) noise and now the full deduction is back.
Source: PBS NewsHour

[back to top]

Honda, Ford Sales Rise; Toyota, FCA, Hyundai-Kia, GM Dip

Ford and Honda posted U.S. sales increases in November while Toyota, FCA, General Motors and Hyundai-Kia slipped in what turned out to be a solid month, driven by light-truck demand and fatter deals. With every automaker reporting, and based on Nissan Motor Co.'s forecast for a 14 percent gain, U.S. light-vehicle sales rose 1.1 percent last month -- exceeding most forecasts.

The U.S. new-vehicle market, after seven straight annual gains capped by a record 2016, is off 1.4 percent through November, mostly on sharply lower car and fleet business. But volume is still on track to top 17 million units for a third straight year.

And the National Automobile Dealers Association on Friday forecast U.S. sales of 16.7 million new cars and light trucks next year. “We expect 2018 to be a robust year,” NADA Chairman Mark Scarpelli said in a statement. “Every dealer in America, myself included, would be thrilled with a seasonally adjusted annualized rate of above 16 million. Because it means that, one, the market is stable, and two, that demand is still healthy."
Source: Automotive News

[back to top]

Why the Market Isn't Sweating the Decline in U.S. Auto Sales

The U.S. auto industry may be closing out the first annual decline since the year GM and Chrysler went bankrupt, but it’s a long ways from carmageddon. Investors are shrugging off the drop in demand that General Motors Co., Fiat Chrysler Automobiles NV and Ford Motor Co. have seen in their home market this year, and aren’t sweating that another industrywide decline is likely in 2018.

The average estimate among 11 analysts and economists surveyed by Bloomberg News is that sales will slide to 16.7 million cars and light trucks in 2018. The industry is on pace to sell almost 17.3 million vehicles this year.

“Every dealer in America, myself included, would be thrilled” with annual sales of more than 16 million, Mark Scarpelli, the chairman of the National Automobile Dealers Association, said last week. “Demand is still healthy.”
Source: Bloomberg

[back to top]

Recall Process Still Waiting for Repair

When Mark Rosekind became the nation's top vehicle safety regulator in 2014, massive recalls of General Motors ignition switches and Takata airbags underscored the difficulty of notifying millions of consumers about dangerous defects and getting their vehicles fixed quickly.

Rosekind, who left his job running the National Highway Traffic Safety Administration at the end of the Obama administration, made improving the recall system and maximizing repairs a top priority. In 2015, he hosted a workshop in Washington with a cross section of stakeholders that examined how to increase recall completion rates.

But today, the process for identifying vehicle owners, informing them about a problem and completing the necessary repairs remains disjointed at best, with few reforms to improve recall efficiency and better protect the public when the next vehicle safety crisis hits.
Source: Automotive News

[back to top]

Dec. 5 Webinar: The Dealership and the Connected Car

Join NADA, TU-Automotive and the National Automotive Service Task Force for an exclusive webinar at 10 a.m. ET on December 5 on the implications of the connected car on dealerships and the dealer business model. Click here to sign up. There is no charge to register.
Source: NADA

[back to top]

Dallas Auto Dealer Settles Charges it Deceptively Advertised Sale and Lease Terms

FTC complaint alleges that important terms in Spanish-language ads were disclosed only in English and in fine print at the bottom of advertisements

A dealership in Dallas, Texas, has agreed to settle Federal Trade Commission charges that it deceptively advertised loan and leasing terms in ads placed in a regional Spanish-language newspaper. The FTC’s administrative complaint charges that the dealership ran full-page Spanish-language ads claiming that consumers could buy or lease a vehicle at certain favorable terms that were prominently stated in Spanish in the ads, with material limitations to those terms provided only in fine-print English at the bottom of the ads.
Source: FTC

[back to top]

NADA Show News
NADA Show 2018: New Distinguished Speaker Series

The Distinguished Speaker Series, offered at NADA Show 2018 in Las Vegas, will take dealerships to the next level. Four dynamic speakers will go beyond the show’s six traditional workshop tracks to discuss Leadership, Culture, Team Building, and Personal and Business Success.

"The Distinguished Speaker Series will help dealers and managers improve their workplace skills through personal development, which we haven't previously focused on at the NADA Show," said Shana Gipson, head of educational workshops at NADA. "The series will provide actionable solutions to take back to the dealership covering business culture, teamwork and leadership."

The speakers are Harry Cohen, Ph.D., president of Entheos LLC; Jim Knight, former Hard Rock International executive and author of Culture That Rocks!; Joe Theismann, former NFL quarterback, broadcaster and entrepreneur; and Mark O’Neil, executive vice president and COO of Cox Automotive.

"These four dynamic speakers offer a diverse wealth of knowledge and experience, making their messages perfect to help dealers and their managers navigate the path to success," Gipson added.

Once you’ve registered for NADA Show 2018, be sure to add these new educational offerings as you plan your schedule.

Read more about all of the workshops and educational sessions at the upcoming NADA Show and be sure to reserve your spot today.
Source: NADA Blog

[back to top]

 
Quotable
"Dealers across the country made it clear to the Senate that preserving floor plan financing is a vital component of pro-growth tax reform."

    -- NADA Chairman Mark Scarpelli, commenting on passage of the “Tax Cuts and Jobs Act,” (H.R. 1) by the U.S. Senate early Saturday morning, NADA Headlines, Dec. 4



"Every dealer in America, myself included, would be thrilled with annual sales of more than 16 million. Demand is still healthy."


    -- NADA Chairman Mark Scarpelli, commenting on NADA's 2018 sales forecast of 16.7 million new cars and light trucks, Bloomberg, Dec. 4

Sponsored by



MyDealership.org Videos




 
 
NADA Webinars
NADA members can view past webinars on-demand at no charge at NADA University Online. Members must create an NADA account before viewing.
Search Back Issues | Unsubscribe | Subscribe | Manage your subscription | email us
NADA For more info, visit nada.org. Any opinions or statements contained herein do not necessarily reflect the views of NADA. Factual errors are the responsibility of the listed publication. This email may contain an advertisement of NADA products and services. Questions or comments concerning NADA Headlines content may be directed to publicaffairs@nada.org. To unsubscribe from future editions of NADA Headlines, click here or contact NADA, 8400 Westpark Drive, Tysons, VA 22102.