by Michael G. Charapp On June 7, 2012, the FTC announced that it had agreed on terms of a consent order with a Georgia Toyota dealer stemming from the dealer’s failure to maintain adequate control of its customer information as required by the FTC Safeguards Rule. The FTC charged that the dealer had violated its [...]
Make the Case Against Dealer Flat Fees
by Michael G. Charapp Have you wondered why industry publications are writing with increasing frequency about the expected demise of finance “markup”? The answer is simple – proponents of dealer flat fees are working to sell the concept that “markups” are evil to regulators like the federal Consumer Financial Protection Bureau and the Federal Trade [...]
Dealers Be Careful of Exotic Doc Fees and Processing Fees
By Michael G. Charapp For the last two decades, dealer doc fees and processing fees have been hot button issues for plaintiff lawyers seeking to sue dealers. As recently as a month ago, the Supreme Court of Arkansas issued a decision that a dealer who is paid doc fees for filling in forms is engaged [...]
Check Your Franchisor Accounts
When was the last time you checked your open account with your manufacturer? When was the last time you checked other accounts, such as a co-op advertising account? The franchisor open accounts should be reconciled monthly. It should be a regular part of the controller’s month end duties. Why? Very simply, there is a great [...]
The Employee Handbook – No Longer an Option
Some dealers refuse to adopt a personnel handbook. They ask, “Why tell employees their rights?” Any dealer asking that question does not understand the purpose of a handbook. A handbook should advise employees what is expected from them. It should establish the standards of conduct that the dealer expects. It is an excellent vehicle to [...]
Used Car Damage – Are You Checking
Many dealers assume that if they simply pull a vehicle history report and it shows no damage, that they are safe in assuming that the vehicle has no serious prior damage. This is simply not the case, however. Even the operators of vehicle history report providers give disclaimers that the vehicle history reports they sell [...]
FAQ: Salesperson Pay
Dealers must be careful about violations of the Fair Labor Standards Act. These actions can be filed either as individual actions or as group actions in federal court, and they can be lucrative for plaintiffs’ law firms. In fact, there are law firms springing up around the country that do nothing but FLSA work on [...]
IRS Updates Form 8300
The IRS has revised Form 8300 for reporting receipt of cash in excess of $10,000. The revisions do not appear to affect the two pages of the form that are filled in by a dealer. The changes appear to be limited to minor editorial revisions and revisions to the instructions concerning taxpayer identification numbers. The [...]
Lincoln Dealers: Pay Up or Get Out?
There has been significant publicity recently about Ford Motor Company’s ultimatum to Lincoln dealers. According to reports, if they want to remain Lincoln dealers, they must invest an average of $1 million to upgrade facilities. Not to handle the cars that Lincoln now builds, mind you. But in the hope that Ford can introduce vehicles [...]
Lease Termination
Dealers generally assume that a customer who leases a vehicle will have the right to buy it at the end for the residual value. That is not always the case. Pricing for a lease is generally based on three pieces: the residual which is the unamortized portion of the lease at which the lessor will [...]
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