NADA Headlines - 07/08/2013 (Plain Text Version)
By Mike Charapp
Based on the bulletin from the CFPB [Consumer Financial Protection Bureau]to large lenders, many experts and industry critics have declared that dealer reserve is dead and that flat fees are imminent. But the motor vehicle dealer industry is pushing back. The National Automobile Dealers Association is leading a multi-front offensive to protect the dealer reserve system. It is engaged in action on regulatory, legislative, and public relations fronts. It is working with finance sources and other interested parties to make the case for the dealer reserve system. The actions are having a positive effect. On May 28, 2013, thirteen Democratic representatives on the U.S. House Financial Services Committee delivered a letter to the CFPB asking for explanations of the agency's actions. On June 20, 2013, 35 Republican House members delivered a letter to the agency raising similar issues. There are many reasons why these representatives, and many others, are concerned about the actions of the CFPB. The CFPB's legal basis is highly questionable. A revision of the way an entire industry has operated for decades should take place through a regulatory process that allows for comments from all affected parties. The finance reserve process in dealerships is a tried and true system honed over the decades.
Despite delay, dealers are urged to act quickly
Car dealers will have an extra year to grapple with a key provision of President Barack Obama's health care law. The question is: Will they make the most of it? The Obama administration said last week that it will wait until 2015 to enforce the so-called employer mandate, which requires businesses with the equivalent of 50 or more full-time employees to offer health insurance coverage to full-timers or pay fines of as much as $3,000 a year per employee. The reprieve came as a relief to auto dealers, many of whom have been slow to move toward compliance as they consider whether they're better off insuring their employees, enduring the fines or finding a way to exempt themselves from the mandate. But the National Automobile Dealers Association and experts on the health care law say dealers shouldn't look at the administration's decision as cause for delay.
As sales of new and used vehicles continue to gain steam, so is the momentum for franchised dealerships bringing on more workers. Employment figures moved higher for the third year in a row, according to the annual report from the National Automobile Dealers Association. In 2012, the average dealership in operation employed 55 people and total dealership employment increased to an estimated 963,400 employees from 933,500 in 2011. Those figures came from NADA Data 2013. “Total dealership employment plateaued at 1.1 million before falling below 1 million in 2009 as the recession commenced,” the report said.
The National Highway Traffic Safety Administration is getting close to finalizing a database that will allow the nation's 240 million car and truck owners to determine if their vehicles have been recalled — and if they've been fixed. Under a highway funding bill signed into law on July 6, 2012, by President Barack Obama, the safety agency is required to put in place a new online database. The agency in September said it is working on the database to boost the number of recalled vehicles that are repaired. The law said that the database is to be in place no later than one year after the law is in place. NHTSA is proposing to offer owners and prospective owners an online search tool at www.safercar.gov that goes beyond the current ability to search by specific make and model vehicle. The new tool would allow them to enter the vehicle identification number — or VIN — to find out if the vehicle has been recalled and if it's been fixed. The agency said this week it is working to finish the database. It said it believes the legal deadline for completion is Oct. 1, but some auto dealers and California assembly members interpret the deadline as July 6.
Supporters of Tesla's quest to sell cars in all 50 states can take heart. They collected enough signatures on their petition to get a response from the White House. The petition drive launched by a fan named “Ken” topped the 100,000 signature mark [last] week, meaning that the White House will answer their request. That doesn't mean the White House supports their cause, and in fact, car dealer franchise laws fall under the purview of individual states.
Digital innovation usually happens in the virtual world, from apps for tablets and mobile phones to the latest in social media. Over the next few years, one of the biggest technological changes will be in the real world of driving a car. Or being driven by one.