CATA News

This class will be an overview of each of the laws and regulations listed above and how they pertain to dealerships in today’s market. The seminar will be doing a deeper dive on the new safeguards rule additions that need to be in place now and regulated come December 9, 2022.

This class will include an overview of:

• Unfair and deceptive trade practices
• Material fact act
• Damage disclosure
• Regulation Z as it applies to TILA
• Holder in due course rule
• Regulation M
• Adverse action notice
• Risk based pricing
• Magnuson moss warranty act
• Regulation B
• Privacy rule
• Safeguards rule with the new additions that come into effect on Dec. 9, 2022GLBA
• Red flag rule
• IRS 8300 form
• Military lending act
• Sales, desking, and menu compliance

When: October 19th 9am – 1pm

Where: CATA HQ

Cost: Free

Register @ www.adgtoday.com or call your BBDS Representative.

Any questions call Mike Browner: (708) 774-1243.

A new set of guiding principles by the National Automobile Dealers Association advocating on behalf of dealer franchise laws could help state association leaders frame discussions with policymakers on legislative issues. This topic was addressed during the NADA’s Legislative Conference held in Chicago earlier this week.

NADA's framework outlines the association's stance on shifting state regulations around how vehicles are sold and automakers' early efforts with build-to-order programs and with over-the-air sales of vehicle features. NADA leaders say that the principles are meant to be a starting point for conversations between dealers and automakers. The principles also help offer a unified message at the national and state levels, and NADA could provide additional resources to state and metropolitan dealer associations in terms of financial and legal help.

Read the principles here: NADA's guiding principles: What it's for and what it's against | Automotive News (autonews.com)

The CATA office and operations will be closed Monday, Oct. 3 due to the Chicago Drives Electric event. Normal business hours resume at 9 a.m. on Tuesday, Oct. 4.

Chicago Drives Electric (CDE) is an EV education event designed to bridge the gap between EV myth and reality. Targeting consumers and media, CDE will take place from Sept. 29 to Oct. 2 at CATA HQ in Oakbrook Terrace. (NOTE: there will be a dealer specific session for CDE on Friday, Sept. 30, see below.)

In alignment with National Drive Electric week, CDE helps to raise awareness of the many benefits of all-electric, hybrid and plug-in hybrid vehicles and help consumers understand how EVs can fit individual needs and lifestyles. In addition to putting interested parties behind the wheel of some of the latest EVs, event organizers are bringing in a variety of experts to help break down the various aspects of EV ownership and tackle complex topics such as range anxiety; at-home charging solutions; on-the-go charging and infrastructure; tax credits and incentives; and where people can begin their search. On-hand experts will include Cars.com, CHARGE Enterprises, ComEd and Powering Chicago.

Automakers will have product specialists on hand throughout the event who will field consumer questions and as they relate to the vehicle brands they represent. Participating automakers include Alfa Romeo, Chevrolet, Chrysler, Ford, Hyundai, Jeep, Kia, Volkswagen and Volvo showcasing a variety of EVs like the Ford F-150 Lightning, Kia EV6 and Volkswagen ID.4, among others.

Registrations for the event were limited to a first come, first served basis. The consumer interest and initial response has been overwhelming; all registration timeslots were filled in less than 12 hours from a single email invitation to the Chicago Auto Show attendee database. 

The CATA plans to carry the CDE branding and name over to the 2023 Chicago Auto Show with the Chicago Drives Electric Indoor EV Track. To help the burgeoning EV market grow faster than it already has, the Chicago Auto Show debuted its first indoor multi-brand EV track during the 2022 Chicago Auto Show last February. Next year, organizers say the track will triple in size and the area will be enhanced as an EV education destination for show-goers, featuring panel discussions with experts available throughout the show to address consumer questions.

“Hosting Chicago Drives Electric this fall will be a great way to test drive the programs we want to implement during the 2023 Chicago Auto Show, while making essential connections in the EV space,” said Jennifer Morand, co-president of the Chicago Automobile Trade Association and co-general manager, Chicago Auto Show. “This next stage of EV adoption will mean getting everyday consumers into mass-market vehicles, and new-car dealerships will be critical to this process.”

According to the 2022 EVForward Dealer DeepDive study by independent analytics firm Escalent, the dealership will remain a pivotal part of an EV intender's shopping experience. The DeepDive survey found that 74% of respondents prefer to buy an EV at a dealership, rather than from an auto manufacturer or third party. Read more about that study in the article below.

This research proves that the franchise dealership model works just as well for EVs as it does for gas-powered vehicles.

“The EV customers of yesterday can’t be compared to today’s EV buyer,” added JC Phelan, CATA chairman. “With game-changing technology like EVs, personal service and education is needed now more than ever before. Plus, the customer wins. Because local dealerships compete for customers on sales and service, the result is that pricing is competitive, and service is plentiful with a nationwide network of local new-car dealers.”

[From Automotive News] NADA data shows that while new- and used-vehicle sales are down through the first half of the year, demand for both sales and service remains high.

2022 is shaping up to be another good year for the nation's new-vehicle retailers, according to dealership financial data from the National Automobile Dealers Association through the first half of the year.

New-vehicle production remains constrained and likely will stay that way for the rest of the year, if not into 2023, Patrick Manzi, NADA's chief economist, told Automotive News following the release of the NADA Data midyear report. The report offers data on sales, service and other financial trends at franchised dealerships through June.

But consumer demand for new and used vehicles remains strong, and parts and service operations also are performing well, Manzi said.

New-vehicle prices should remain elevated for the rest of the year, he said, in part because of the combination of automakers prioritizing higher-trim models and lower incentive spending. Average incentive spending per vehicle declined every month to a record low of less than $1,000 in June, according to the midyear report. That's down from a record high of more than $4,700 in April 2020.

Used-vehicle pricing remains high but may begin to moderate as wholesale prices have begun to drop in recent months, Manzi said. That could cause some dealers to adjust how much they pay to acquire used vehicles and how they price them, he added.

Read the full Automotive News story here.

In today’s automotive retail landscape, there’s little incentive for dealers to spend money on marketing when inventory is so limited. But, it is an opportunity to hit the reset button in the showroom and back office.

Digital retailing is one place where dealers can shift gears and take advantage of the inventory shortage to “evolve” the car-buying process. Rather than fearing digital retailing, dealers should embrace it as an opportunity to improve the buying process, making it more transparent, customizable, user-friendly and, most importantly, more profitable. Digital retailing is really a win-win for the consumer and the dealer.  Consumers appreciate a more streamlined process to minimize “perceived” pain points and dealers win by providing a digital check out option that requires minimal re-work to close and provides solid front and back-end margins.

According to J.D. Power, 25% of people are willing to conduct the car-buying process online. And more-importantly, the digital retailing process can be controlled to provide a pleasant experience every time. J.D. Power also notes that digital shoppers are more willing to purchase F&I products and dealer accessories when purchasing digitally.

When selecting a digital retailing solution, many dealers don’t realize they have several options.  What is key is to invest in a solution that provides a minimum 25% close rate.

When selecting a digital retailing solution, dealers should make sure of the following:

On the flip side, the keys to digital-retailing success also depend on a 100% buy-in across the store, from the owner to the GM to the used-car manager to the parts manager to the F&I manager. It’s also important to select the right calls to action on your website. And finally, utilize your current marketing tools, like email, social and traditional digital to “brand” your digital marketing tool and create a competitive advantage in your market!

The time is now to hit reset. For many dealers, digital retailing is something that’s being shoved down their throat by automakers. However, that doesn’t necessarily need to be the case as dealers have a great opportunity to demonstrate again to the OEMs that retailing of vehicles belongs in the hands of the franchised network.

[From: Reuters] The U.S. Transportation Department (USDOT) said on Tuesday it has approved the electric vehicle charging station plans for all 50 states, Washington and Puerto Rico covering about 75,000 miles (120,700 kms) of highways.

The November 2021 $1 trillion infrastructure bill provides $5 billion to help states install EV chargers along interstate highways over five years. States now have access to more than $1.5 billion to help build EV chargers, USDOT said. The White House announced earlier this month it had approved 35 of the 50 state plans.

"We’re not going to dictate to the states how to do this, but we do need to make sure that they meet basic standards," U.S. Transportation Secretary Pete Buttigieg said earlier this year. USDOT said states should fund DC Fast Chargers; stations should have at least four ports capable of simultaneously charging four EVs and install EV charging infrastructure every 50 miles (80.5 kms) along interstate highways and be located within 1 mile of highways.

Federal funds will cover 80% of EV charging costs, with private or state funds making up the balance.

Read the full article here.

EV owners and prospective buyers expect automakers to offer both an online and in-person shopping experience, according to the 2022 EVForward Dealer DeepDive. The EVForward team, part of advisory firm Escalent, works to capture the attitudes, behaviors, and opinions of the next generation of EV buyers.

The 2022 Dealer DeepDive report surveyed 1,289 people, of which 88 are EV owners. The survey grouped participants into EV intenders, or those who are most likely to shop for an EV, as well as EV opens, who are somewhat likely to purchase an EV, and EV resistants, drivers who are more comfortable with internal combustion engine vehicles.

The results? Prospective buyers want to use both online and in-person resources to buy an EV. The report suggests both legacy and EV specialist automakers offer an omnichannel buying experience, said K.C. Boyce, Escalent's vice president of powertrain innovation and energy transformation.

The dealership will remain a pivotal part of an EV intender's shopping experience, according to the report. The survey finds 74 percent of respondents would prefer to buy an EV at a dealership, rather than from an auto manufacturer or third party. Participants who own an EV, EV intenders and younger buyers are more likely to prefer purchasing directly from an automaker. However, a majority of each group still prefers buying from a dealership.

Boyce is slated to speak at the CATA this Thursday to national and local media outlets as well as policymakers during the press day for Chicago Drives Electric. 

To read more about the Dealer DeepDive report, click here.

Starting next June, about 50,000 drivers living in unincorporated Cook County will have one fewer tax to pay. The Cook County Board on Thursday voted to do away with its so-called wheel tax. For those affected, it cost $80 or $100 a year, based on the vehicle size. Semis, tractors and buses pay anywhere from $100 to $230, depending on weight.

The county has collected an average of $3.6 million a year from the tax in recent years. Doing away with the charge will save about $500,000 in annual administrative costs, including 80,000 staff hours, according to county finance officials. Those staff hours will be directed elsewhere, they said in a news release.

Several suburban municipalities have done away with city stickers in recent years, but some kept the registration cost in place. According to a 2021 Chicago Metropolitan Agency for Planning report, 159 municipalities in northeastern Illinois impose annual vehicle fees on residents, ranging from $5 to $90. Among those who have either repealed required vehicle sticker charges: Hoffman Estates, Rosemont, Oak Lawn, Des Plaines, Lombard and Palatine.

Chicago has seen several years of fine and fee changes related to vehicle stickers, which cost $90 a year, as well as parking tickets and vehicle booting and towing. Such charges — and late fees or violations related to them — can lead to spiraling debt.

“It is our duty to be responsible fiscal stewards for our working families,” Morrison said. “As many municipalities have eliminated their vehicle stickers, unincorporated Cook County residents should not be taxed more than their neighbors. I will continue to look for opportunities to find savings as well as provide effective services for our residents.”

The ordinance takes effect on June 30 next year.

Earlier this week, CATA Co-Presidents Dave Sloan and Jennifer Morand, along with CATA Treasurer and Government Relations Committee Chairman Jason Roberts, and NADA Directors, Desmond Roberts and Joe Massarelli, attended NADA’s Washington Conference. The two-day conference is an annual gathering of the automotive retailing industry including politically active members, national board members and state association leadership. The event highlighted the top legislative and regulatory issues facing dealers and featured keynote addresses from elected officials. Additionally, while in D.C., the team set up meetings on Capitol Hill with congressional representatives to discuss current issues. 

The 2022 Washington Conference keynote speaker lineup included Senator Amy Klobuchar (D-Minn), Rep. Dan Kildee (D-Mich.), Rep. Ashley Hinson (R-Iowa), political analyst Nathan Gonzales and Marc Short, former chief of staff to Mike Pence.

Congratulations to NADA’s Legislative Committee Chairman Desmond Roberts for what was considered a very successful Washington Conference. He rallied the dealers in attendance from the main stage as they went to the Hill for meetings Wednesday afternoon.

There are three main issues the industry is facing:

FTC Vehicle Transaction Rule

The FTC recently proposed a vehicle transaction rule that would overwhelm car buyers and small businesses with additional paperwork, needlessly lengthening the sales process. The rule was proposed without credible data-driven analysis or the necessary time for public comments to avoid the unintended consequences to consumers and small businesses. Unfair and deceptive practices in vehicle sales or financing are already illegal and heavily regulated. 

FTC’s proposed rule would make the auto buying experience worse—not better—for consumers. As the auto industry works to streamline the purchase process post-pandemic, the FTC’s proposed rule would only swamp dealers and car buyers with greater inefficiency and complexity. NADA is actively urging members of Congress to weigh in with the FTC to ensure that this rulemaking process is fair and based on valid research and data rather than assumptions.

Supply Chain Disruption LIFO Relief Act

Vehicle assembly plants and suppliers around the globe ceased or slowed production during the pandemic, drastically reducing new vehicle inventory. The shortfall worsened with the worldwide shortage of semiconductors, which are essential to complete vehicles manufactured today. With no way to replenish vehicle inventory, dealers using the last-in, first-out (LIFO) accounting method face major unanticipated tax liability due to circumstances beyond their control. Treasury recently indicated its support for a legislative solution to this issue and that they will work cooperatively with Congress to that end. NADA is working hard to urge Congress to pass this legislation to allow businesses on LIFO extended time to replace vehicle inventories as pandemic-related global disruptions and reduced auto production have made it nearly impossible to replenish new vehicle supply.

Catalytic Converter Anti-Theft Legislation

Catalytic converters are being stolen at increasingly higher rates due to their valuable medals. Thieves can easily steal catalytic converters from unattended vehicles and, since catalytic converters aren’t traceable, there is a lucrative market for those stolen parts. This has been a major issue not only for the Chicagoland area, but also for the nation. The act would assist law enforcement in their efforts to combat this crime by providing a national framework that would mark catalytic converters, establish federal criminal penalties and create a more transparent market that deters theft.

Your association’s leadership took these critical messages to local legislators in meetings on Capitol Hill.

U.S. House Representative Jesus “Chuy” Garcia was receptive to the CATA’s issues and asked for more follow-up details on each. Jason Roberts set the stage by introducing himself as the Vice Treasurer and Board of Director for Chicago’s Little Village Chamber of Commerce, the neighborhood in which Garcia resides. This seemed to resonate immediately with Rep. Garcia, and he gave the team more time than originally allotted as they briefed him on the key issues at hand. His Chief of Staff also seemed fully aware of the challenges with which new-car dealers are currently faced. In fact, two of his staff members recently purchased new vehicles and couldn’t imagine the process being further complicated with more disclosure paperwork, lengthening the total time it takes for the vehicle transaction.

Congressman Raja Krishnamoorthi, who represents the 8^th District of Illinois including Chicago’s west and northwest suburbs, was also receptive to the FTC message and acknowledged how this proposed rule would overcomplicate the car buying process for both consumers and business owners. He asked for more information to review, which was a promising sign. He was also in agreement on the catalytic converter issue, already fully aware of the local problem. Note: Congressman Krishnamoorthi already signed on as a co-sponsor of the Supply Chain Disruption (LIFO) Relief bill.

Congressman Brad Schneider, who represents Illinois’ 10^th District, was briefed on the LIFO bill by NADA Directors Joe Massarelli and Desmond Roberts. The first goal was to get Rep. Schneider’s support as a co-sponsor on the LIFO bill, which looks promising. He also understood dealer concerns about the FTC’s proposed rules and suggested taking our counterpoints to the House Oversight Committee.

Congressman Mike Quigley, who represents Illinois’ 5^th District, is another pro-business Democrat who is always willing to listen to dealer concerns.  He and his chief of staff promised to investigate dealer concerns about the FTC overreach on its proposed rulemaking. They also understood the LIFO issue and the catalytic converter issue asked for follow up on each.

EV Federal Tax Credits and Incentives

With the federal push for widespread EV adoption, the team also shared the reasons that franchised new-car dealers are critical to this next phase of the consumer EV revolution. NADA created a helpful infographic that helps break down the timeline for new clean vehicles tax credits available today through 2032.

National, state and metro associations along with dealers’ grassroots efforts remain crucial, and our voices are heard collectively when action is taken. With the help of the NADA, CATA and all our dealers, our voice resonates when tackling these important legislative issues. To that end, we want to reiterate the importance of the NADA PAC to assist in these efforts. To find out more about NADA PAC and its support of pro-dealer candidates, please call Dave Sloan at the CATA at 630-424-6055. If we don’t already have your NADA PAC permission on file, please find the form here and submit it to NADA.