CATA News

Environmental groups pushed the reintroduction of House Bill (HB) 1634 mandating the state of Illinois to adopt California’s emissions standards, which would effectively require 100% of Illinois vehicle sales to be fully electric by 2035. This was met with a wave of opposition, preventing its passage in committee.

Furthermore, earlier this week, Governor Pritzker came out publicly with his opposition of the proposed legislation. He said that now isn’t the right time for Illinois to adopt California standards, even though Illinois is working its way to having zero emissions on the road. He said the strategy there is to create incentives to lead people in that direction versus enforcing strict standards.

[From Wards Auto] The dealer is still a vital part of the car-buying process, especially for younger consumers,  according to the recently released Cars Commerce Industry Insights Report.

“The fact that 80 percent of Gen Z want to finish their transaction at the dealership is a really significant number,” Rebecca Lindland, senior director of industry data and insights at Cars Commerce, tells WardsAuto. “For us, it reinforces the idea that dealers are really valuable.”

In January, 80 percent of all consumers said they preferred to buy their vehicles in person, according to the report. The report notes 89 percent of Baby Boomers – those born between 1946 and 1964 – are likelier to prefer an in-person purchase. But 80 percent of Gen Z – born between 1997 and 2017 – also prefer buying their vehicles from dealerships, although that group often purchases from online retail sites. The most likely to purchase their cars online, at 16 percent, are millennials – those born between 1981 and 1984.

Cars Commerce finds that 59 percent of all consumers say it is important to touch, feel and test drive a car before purchase. That usually means going to a dealership. A car is still most people’s second-largest purchase after a home, Lindland says.

“They want to know who they are doing business with,” she says. “There is an element of authenticity that you want to look the person in the face.”

Discussions with friends or family are their most-used car-buying information source.  Gen Z buyers are more likely to have purchased a used car than any other generation. At 12 percent, this generation also is the most likely to have leased a vehicle. The preference for leasing or buying used vehicles may reflect the high prices of new cars, but that may change. The number of affordable new-car options is growing, the report says.

In January, the report says entry-priced inventory, which Cars Commerce defines as costing $29,000 or less, rose by 63.1 percent compared to the same month in 2023. Entry-priced inventory is still 79 percent below the January 2019 level, however. Growing the number of affordable options faster faces multiple challenges, Lindland says.

“Vehicles are becoming more expensive because the safety requirements are growing. Also, manufacturers have to earn back their investment,” she says. “It is a combination of things that are driving prices up. It’s really, really challenging, but we are seeing a 63% increase in the entry-level market. It is just not back to where it once was.”

The average list price on Cars.com for a new vehicle in January was $49,096. That is down less than 1 percent compared to January 2023 and December 2023. The Cars Commerce New Car Price Index (NCPI) estimates the total cost to purchase and finance a new vehicle, including estimated options, taxes, fees and interest for the entire loan term.

According to the NCPI report, the total cost to purchase and finance a new vehicle was down 3.3 percent in January, but it was still 32.7 percent above MSRP, the report says. There are more vehicles to choose from now, however: Inventory was up 36 percent in January compared to the same month in 2023. That means a buyer’s market is returning, Lindland says. For dealers, she emphasizes the need to respond promptly when a consumer is interested in a particular vehicle.

“Consumers have more choices now,” Lindland says. “Maybe that vehicle is available on someone else’s lot when it may not have been (previously). Be responsive and knowledgeable; we encourage dealers to have the same type of experience online and on the lot.”

Businesses, tax professionals and others who want to learn more about resolving incorrect Employee Retention Credit claims can view the IRS’s free webinar about the ERC Voluntary Disclosure Program and other IRS efforts to help taxpayers who may have been misled by aggressive marketing and misinformation around ERC eligibility.

The recorded webinar “Employee Retention Credit – Voluntary Disclosure Program” is now available on the IRS Video Portal. The deadline to apply to the program is March 22, 2024.

This 75-minute webinar focuses on:

This webinar may be useful to:

ERC Voluntary Disclosure Program: The ERC Voluntary Disclosure Program helps employers whose claims were paid by Dec. 21, 2023, pay back the money they received after filing ERC claims in error. The key benefit of the program is that employers have to pay back only 80% of the ERC they received, with no penalties or interest. The deadline to apply is March 22, 2024.

ERC withdrawal process: The ERC claim withdrawal program is still available. Businesses who want to withdraw a claim that hasn’t been processed or paid should quickly pursue this process if they see their claim is now ineligible. The IRS will treat withdrawn claims as if they were never filed. No penalties or interest will apply.

ERC moratorium update: On Sept. 14, 2023, following concerns about aggressive ERC marketing, the IRS announced a moratorium on processing new ERC claims. A specific resumption date hasn’t been determined. The IRS continues to process ERC claims submitted before the moratorium, but with additional scrutiny and at a much slower rate than before the agency’s approach changed last year. During the coming months, the IRS plans to continue program integrity measures before the agency anticipates processing claims submitted after the moratorium began.

More information:

In the ever-evolving world of vehicle fraud crimes, the CATA has seen a new manner of identity theft, both personal and business identities, strike dealerships.

Recently, a local car dealership was contacted by McHenry County Sheriff’s office regarding a stolen identity, of both a business and the business owner. The bad guy had used the business name to fund and purchase a 2023 Dodge Durango SRT Hellcat, using a (fraudulent) IL driver’s license with his photo on it. Law enforcement is currently looking for the vehicle.

It did not have LoJack, and Uconnect is no longer providing a location. Last known location is the City of Chicago.

After discovery of this business deal, a review of other deals for businesses produced another 2023 Dodge Durango SRT, purchased in a business name and week after the first discovery.

The vehicle was equipped with LoJack but it appears it was removed approximately 2 weeks after delivery.

As you can see the same tactic was used for both deals and additionally it has been discovered that both bad guys used the same insurance policy number on their documents. With this correlation, this is more than a tactic but an active criminal ring. They are very schooled as what business documents are necessary to purchase a vehicle in a business name. The typical red flags are not present.

As part of the Biden administration’s Regulatory Plan, the U.S. Department of Labor (“DOL”) has released its 2024 regulatory agenda.

The DOL first summarized the final rules that it issued during 2023, which included the following:

A final rule to provide better guidance on whether a worker is an employer or independent contractor under the Fair Labor Standards Act (“FLSA);The DOL also outlined its priority agenda items for divisions of the agency as follows.

Wage and Hour Division (WHD)

Employee and Training Administration (ETA)

Occupational Safety and Health Administration (OSHA)

A proposed rule updating standards for emergency response and preparedness to reflect the full range of hazards and concerns first responders face and changes in performance specifications for PPE. As a reminder, as benefit of CATA membership, dealers  receive employee relations and HR counsel from SESCO. Benefits include telephone, e-mail and research assistance regarding terminations and disciplinary matters, collective bargaining agreements, federal and state employment regulations, difficult people matters and all other HR Systems and Practices. In addition, CATA members receive attorney analysis and review of personnel policies, work rules and employee handbooks as well as HR assessment for wage and hour compliance.

SESCO also produces a bi-monthly newsletter. Highlights for this issue include:

• A Case for and Against the Add-On Bonus Incentive
• Immigration Law Compliance
• FLSA Update

Download the latest issue HERE. 

Contact Jamie Hasty with specific questions at jamie@sescomgt.com or 804-931-6281.

[From the desk of CATA General Counsel Dennis O'Keefe] Section 6 (b) of the Illinois Warranty Law (815 ILCS 710/6) contains two provisions that dealers should be aware of. The first provision states:

There shall be no reduction in payments due to pre-established market norms or market averages. Manufacturers are prohibited from establishing restrictions or limitations of customer repair frequency due to failure rate indexes or national failure averages.

The second provision states:

If a manufacturer imposes a recall or stop sale on any new vehicle in a dealer’s inventory that prevents the sale of the vehicle, the manufacturer shall compensate the dealer for any interest and storage until the vehicle is repaired and made ready for sale.

With regard to the second provision, each OEM might have a different method for dealers to recoup interest and storage. However, should any OEM take a position that is contrary to either of these provisions, or ignore either provision, dealers should make the OEM aware of the statutory language quoted above.

Presented by:

Tuesday, March 5 | 3-4pm ET

Join the ATD Chairman, President, and members of the Regulatory Affairs team as they provide an overview of the new CARB regulations, the EPA NOx regulation, the pending EPA GHG Phase 3 regulation and the impact they will have on the truck market. REGISTER.

The Chicago Auto Show raised more than $2.8 million benefiting 18 local charities at the First Look for Charity gala. All told, the black-tie benefit, held the evening before the show opened to the public, raised $2,804,014. The fundraiser’s 32-year event now tallies more than $62 million raised.

“The Chicagoland new-car dealers are proud to produce this annual fundraiser that directly benefits the organizations doing amazing work right here in our communities,” said JC Phelan, 2024 Chicago Auto Show chairman. “This elite event is always a highlight of the Chicago Auto Show where socialites and auto enthusiasts come together to get a preview of this year’s show all for a great cause.”

First Look for Charity provides attendees with an exclusive viewing of the Chicago Auto Show a day before it opens to the public. Tickets to the fundraiser are $325 each, and purchasers may elect to have their proceeds equally benefit all participating charities, or any one charity of their choosing. The show floor is filled with gourmet food from local Chicago restaurants, live music and premium drinks.

This year, one lucky guest won the First Look for Charity grand prize, a 2024 Chevrolet Blazer, compliments of the Chicagoland and Northwest Indiana Chevy Dealers. John and Linda Grabsky of Lombard, Illinois had the winning ticket.

“Being the spouse of a longtime Advocate Health Care employee and First Look supporter, we remain in disbelief to this day that we won,” said John Grabsky. “All I can say is that winning on the very first round is amazing in itself! Saved a lot of people the anxiety of waiting, including myself. I don’t think I’ll believe it until it is in our garage.”

Onstage following the giveaway announcement, John Grabsky shared his excitement for taking the new Blazer on a road trip to Moab, Utah.

The 2024 First Look for Charity beneficiaries include: 100 Club of Illinois; Advocate Health Care; ALS United Greater Chicago; Ann & Robert H. Lurie Children’s Hospital of Chicago; Bloomington-Normal YMCA; the Boys & Girls Clubs of Chicago; Cal’s Angels; Catholic Charities of the Diocese of Joliet; Franciscan Community Benefit Services; Glenwood Academy; Habitat for Humanity; the Jesse White Tumbling Team; Lydia Home & Safe Families for Children; and Misericordia; Sertoma Star Services; Special Olympics Illinois; Susan G. Komen, Chicago; and Turning Pointe Autism Foundation.

New-vehicle prices fell in January with weaker retail demand. Incentives relative to price reached the highest level since July 2021. Discounting relative to the manufacturer’s suggested retail price (MSRP) has decreased slightly to nearly half of what it was in 2019 after being nonexistent a year ago.

Used-vehicle prices were flat again in January, as used retail sales in January improved over December but were down slightly year over year with harsher winter weather this year.

Consumer credit growth slowed significantly in December as consumers pulled back on all types of credit. Access to auto credit declined in January as credit tightened across all channels and across most lender types, according to the Dealertrack Credit Availability Index published this morning.

Auto loan performance deteriorated in January as delinquencies and defaults increased.

Automotive Market Weekly Summary Link (5-min read): https://www.coxautoinc.com/market-insights/auto-market-weekly-summary-02-12-2024/.

Chicago Auto Show organizers, in partnership with A Girls Guide to Cars, held the seventh annual What Drives Her program during the show’s Media Preview on Thursday, Feb. 8. Industry leaders from across the country came together for a robust discussion and award recognition ceremony to highlight women in four different categories: Industry Trailblazer, Best in Craft Media, Automotive Ally and Best Retailer. This year’s awards also recognized an industry leader who has lifted others up with the 2024 Lifetime of Inspiration award. The program gives industry leaders a stage to share trends, stories and personal anecdotes of the integral role that women hold in the auto industry.

(click image for video)

This year’s program, presented by Nissan and sponsored by CDK Global, brought female executives to the Chicago Auto Show stage presenting research centered on female purchasing power and trends. The panel, titled “What Drives Her…To Buy a Car,” was moderated by Kathy Gilbert, senior director minority dealer and women retail, CDK Global. Panelists included Amy Emmatty, CRO, Productions Plus; Trudy Hardy, vice president and region Americas head, BMW Motorrad; and Trisha Jung, senior director for EV strategy and transformation, Nissan.

“It’s humbling to see just how What Drives Her has become a cornerstone event of the Chicago Auto Show’s Media Preview,” said Jennifer Morand, co-founder of the What Drives Her program and general manager of the Chicago Auto Show. “To see women – and men – come together in support of the extraordinary females who are shaping our industry and driving change has been incredible.”

The 2024 winners for each category are as follows:

Best Retailer: Gabrille Abinion, general manager, Fox Valley Volkswagen, has always been driven and passionate following her father’s footsteps in the automotive industry. In 2017, Abinion joined her family’s auto group as an Operation Manager. This led to an opportunity to become the general manager of Fox Valley Buick GMC. It was at this time that she was introduced to General Motors (GM) Minority Dealer Development program through her Dealer 20 group and is now a member of the GM Dealer Development National Candidate Pool. In efforts to diversify her experience within the Auto Group’s portfolio, Abinion is now the General Manager of Fox Valley Volkswagen. She has helped her Volkswagen stores to set records and sales, as well as breaking the record for Service & Parts growth of all time, three-times in 2023.

“Thank you so much for this incredible honor,” said Abinion. “My dad was an immigrant from the Philippines when he came to this country. This changed everything for my family. Thank you so much for your support.”

Best Retailer finalists included: Amanda Pickett, BDC manager/finance manager, Advantage Chevrolet Bridgeview; Jennifer Tonelli, controller, Mike Anderson Chevrolet of Merrillville.

Lifetime of Inspiration: This special award was presented by the CATA’s Jennifer Morand to the organization’s longtime president, Dave Sloan. “It is with great pleasure and a deep sense of gratitude that we present the Lifetime of Inspiration Award to a remarkable leader and mentor, Dave Sloan,” said Morand.

“Dave is not just a name associated with the Chicago Auto Show, he is synonymous with dedication, leadership and innovation. As many of you may know, Dave has been a driving force behind the Chicago Automobile Trade Association, producer of the Chicago Auto Show, and has devoted more than 30 years to the local dealers and the show. Under his leadership, the show has grown and evolved to be the premier consumer auto show in the country.” Morand continued, “What sets Dave apart is not just his professional accomplishments, but the legacy of mentorship he leaves behind. It takes a special kind of leader to recognize the potential in others. I personally am so grateful for Dave and his vision of the future of this organization and show. Even though it’s bittersweet, we all wish him the best as he will retire in April. In recognition of Dave’s lifetime of inspiration, dedication and visionary leadership, it is my privilege to present him with the What Drives Her Lifetime of Inspiration Award.”