CATA News

The automotive retail industry is changing at a rapid pace with levels of innovation unseen since the invention of the combustion engine. It’s time to embrace change and move into a future where the car buying experience is digital-first, personalized and customer-centric. Let’s rethink the role of the dealership and ensure we’re ready for this seismic shift.

Addressed by C-suite OEM and dealership speakers, this two-day event has been carefully curated to provide solutions for the most critical automotive retail issues including:

Presenters include:

Reserve Your Place Now

The Biden administration on Wednesday proposed new and very aggressive emissions regulations for new light-duty vehicle model years 2027-2032. These proposals go well beyond anything this or prior administrations have announced or targeted in the past and would effectively require 2/3 of all new vehicles sold in 2032 to be EVs.

America’s franchised new-car dealers remain all-in on EVs. During the comment period, NADA will explain everything that dealers are doing to get ready for widespread and mass-market EV adoption, including the substantial investments already made – and the billons of coming investments – in tools, training and equipment necessary to facilitate a first-tier education, sales and service experience for EV customers across the entire market and price-point spectrum.

NADA will also explain how emissions mandates that go too far too fast are concerning in that they:

In the end – and regardless of the stringency or feasibility of the final regulations – one thing is already clear: Dealers will be more essential than ever in helping America embrace EVs and get us to the adoption percentages that the administration is pursuing.

The Consumer Financial Protection Bureau (CFPB) issued yesterday its long-awaited final rule to implement section 1071 of the Dodd-Frank Act requiring financial institutions to compile, maintain and report to the CFPB certain data on credit applications received from small, women-owned and minority-owned businesses.

The final rule applies only to financial institutions within the CFPB’s jurisdiction. In particular, this does not include motor vehicle dealers engaged in indirect vehicle financing transactions, which are subject to the jurisdiction of the Federal Reserve Board (FRB) in this matter. The FRB has not yet proposed a rule to implement section 1071 for such motor vehicle dealers, although, when it does, the FRB can be expected to seek consistency with the CFPB’s final section 1071 rule. For this reason, NADA and the National Association of Minority Automobile Dealers (NAMAD) have jointly advocated on this issue on multiple occasions to both the FRB and the CFPB.

For banks, finance companies and other financial institutions that are covered by the CFPB rule and must report data to the CFPB, the requirements are extensive and these financial institutions may seek to have dealers make adjustments to the credit application process to facilitate their ability to satisfy these requirements. 

While the NADA Regulatory Affairs team is in the process of reviewing the CFPB’s final 888-page rule, certain features are particularly noteworthy:

NADA will disseminate additional information on the CFPB’s final rule after it has been more thoroughly analyzed and NADA will continue its active advocacy with the FRB. 

We are quickly approaching the one-year anniversary of CATA’s new website and the debut of our online portal for membership management and dealer forms ordering!

Of course, we hope that you are taking full advantage of the membership portal, but if you haven’t yet used the portal, we have compiled a comprehensive guide that walks you through registering and accessing the portal, adding additional employees at your dealership to the portal and ordering Odometer and Used Car Buyer’s Guides.

It is important to note that only ONE person at your dealership can manage the membership. That individual is called the “bundle coordinator” and he or she has the ability to add additional employees and pay membership dues. Any employee that is registered can access the “members only” area and order dealer forms.

Click the appropriate links below to download the Getting Started PDF.

The Federal Highway Administration announced a new Federal Charging and Fueling Infrastructure Discretionary Grant Program, otherwise known as the CFI Program, which provides funding for EV charging and other alternative fuel infrastructure projects. Neither dealers nor dealer associations are eligible to apply for CFI program money. Even in instances where a manufacturer has implemented or initiated a voluntary or mandatory dealer program that includes publicly available chargers, or that promotes publicly available chargers near an interstate(s), CFI money is not available to dealers or dealer associations to help offset such costs.

“Eligible entities,” such as states, cities, towns, state and local government organizations, transportation authorities and Indian tribes, that are awarded a CFI grant, may use up to 5% of their grant money to partner/contract with dealers to develop and implement education programs regarding the use of zero-emission vehicles and related infrastructure.

On a related note to the CFI Program, the Chicago Auto Show Premier Sponsor, Autel, which provided charging on the show’s Chicago Drives Electric indoor EV track, is planning a Lunch and Learn in May at the CATA to offer dealers special pricing on its EV charging equipment. In addition, Autel and the CATA is encouraging dealers to invite their respective village mayors and planning officials to the Lunch and Learn to hear about the CFI program and how their municipalities can take gain from it. This is a win-win for dealers. More charging infrastructure in their hometowns can encourage EV adoption.

Watch for more information about Autel’s May Lunch and Learn in upcoming E-Newsletters.

Many dealers right now are struggling with newly expanded FTC Safeguards Rules. Something as simple as taking a photo of a customer’s driver’s license when that potential buyer is in a hurry to take a test drive can result in big fines. Beyond that, there are many other pitfalls from lead to sale. The newly expanded FTC Safeguards rule takes effect June 9, 2023, and requires administrative, physical, and technical compliance to ensure the security and confidentiality of consumer information, prevent unauthorized access to consumer information, and to protect against any threats or hazards to the security or integrity of that information. Whether you’re the owner, General Manager, Dealer Principal, F&I Manager, or General Sales Manager, the new guidelines impact you.

These compliance requirements can have a huge impact on your dealership if you’re not prepared and will result in devastating fines. Most dealers struggle with what the sales team collects, creates, and controls, which is why they need a platform to enforce compliance across the four “Ps”: people, policies, paperwork, and process. Here are five of the top violations that involve those four Ps and that are putting your dealership at risk and how leading dealers avoid them.

CATA’s newest allied member, Informativ, brings together leading companies CreditDriver, Credit Bureau Connection (CBC), and Dealer Safeguard Solutions (DSGSS) and their long history of dealership marketing, fraud protection, dealer compliance, and credit reports. Informativ can provide the expertise and guidance necessary to successfully navigate the upcoming FTC Safeguards Rule. For more information contact, Christina Wofford.

One-Third of Americans Would Consider EV Purchase

Just over one-third of Americans would consider buying an electric vehicle for their next model, a new Reuters/Ipsos poll found. The seven-day poll completed on Monday found 34% of all respondents would consider an EV, while 31% said no. Among Democrats 50% said they would consider an EV, while 26% of Republicans and 27% of independents said they would consider. (Source & full article: Reuters)

EV Sales Expected to Reach Historic Highs this Year as Affordability Improves

Sales of electric vehicles are expected to reach historic highs this year in large part because they’re becoming more affordable, according to a new J.D. Power study released this week. However, shoppers who are interested in an EV but still can’t afford a new one, won’t find much relief on used car lots. Consumers have long cited high prices as a roadblock to buying an EV, but the new study states “approximately half of all vehicle shoppers nationwide will have a viable EV option available to them by the end of 2023. By the end of 2026, that number is expected to surpass 75%.” (Source & full article: Forbes)

The Federal Reserve Bank of Chicago is looking to update its Beige Book Dealer Survey. This survey will be combined with information received from other economic sectors and will be summarized and inserted into the Federal Reserve’s Beige Book. The Beige Book is the Fed’s update on current business conditions that allows us to see if Main Street conditions match what the statistical data are telling us. The Beige Book is released 2 weeks before each FOMC meeting. The FOMC meeting is the one that decides what to do with monetary policy and short-term interest rates. When the Beige Book is published, nothing will be able to be directly attributed to any one person or firm because the Beige Book is information gathered from hundreds of different sources that is organized by economic sector.

Click here to download the ONE-PAGE survey in Microsoft Word. Then please email completed surveys to Mark Bilek at the CATA. All information will be kept confidential.

Annual CATA Member Golf Outing: Tuesday, June 13

BBQ for the Troops: Saturday, July 15

Chicago Drives Electric Dealer Day: Thursday, September 28

The Internal Revenue Service today issued Notice 2023-16 that modifies the definitions of certain vehicle classifications for the new, previously owned and qualified commercial clean vehicle credits. As a result of this notice, the IRS updated the related frequently-asked-questions (FAQs) for these credits.

Today’s guidance modifies Notice 2023-01 by changing the vehicle classification standard by which vans, sport utility vehicles, pickup trucks and other vehicles are defined. Fact Sheet 2023-4 updates FAQs related to new, previously owned and qualified commercial clean vehicles.

The FAQs revisions are as follows:

These FAQs are being issued to provide general information to taxpayers, tax professionals and others interested in the issue as expeditiously as possible. More information about reliance is available here.

The NADA also provides additional guidance:

Effective Jan. 1, 2023, a federal previously-owned clean vehicle tax credit (Used EV Credit) potentially applies to used battery electric (BEV), plug-in hybrid electric (PHEV), or fuel cell electric (FCEV) vehicles sold by licensed dealers between 2023 and 2032. The maximum Used EV Credit is the lesser of $4,000 or 30% of the sales price. But, as detailed below, many used EV sales will be ineligible for a Used EV Credit. To the extent possible, before buying a used EV, determine whether a Used Vehicle Credit may apply when the EV is later sold by the dealership.  

I. For starters, to be eligible for a Used EV Credit, used EVs must:

Bottom Line: The above requirements should be easy to determine prior to buying a used EV.      

II. Also, to be eligible for a Used EV Credit, a used EV may not have been sold after 8/16/22 to a Qualified Buyer who was not the original owner. A Qualified Buyer is someone who:

Bottom Line: If a used EV is sold after 8/16/22 to a Qualified Buyer who was not the first owner, the Used EV Credit is no longer available for that EV. However, it may be difficult to determine with certainty whether a prior used EV owner was a Qualified Buyer. Yes, a vehicle history report should show if a used EV was sold after 8/16/22 to an individual who took title in the United States in his or her name. But, determining whether that buyer was deductible on someone else’s taxes, or previously claimed a Used EV Credit, will be difficult at best. Only if a used EV was not sold after 8/16/22 or was sold since then but only to non-individuals (e.g., businesses), will it be reasonable to assume that it was not previously sold to a Qualified Buyer and may qualify for a Used EV Credit.    

III.  When a used EV is sold at retail, four additional requirements must be met for a Used EV Credit to apply. Specifically:   

[1] $150,000 for married filing jointly or a surviving spouse, $112,500 for heads of households, $75,000 for all other tax filers

Bottom Line: Even if one or more of the above four requirements cannot be met, customers often will be willing to purchase a used EV without a federal Used EV Credit.