CATA News

There is cause for concern regarding the prospects for the Chicago Area new vehicle market. Supply chain issues continue to limit inventories, inflation is surging, interest rates are moving higher, economic growth has turned negative, and consumer sentiment is weak. It’s a formidable list. But there are two key positives that will likely prevent deterioration in current sales rates and should provide a boost when supply issues abate and the economic picture brightens. Click here for the third quarter 2022 Chicago Auto Outlook.

The nomination of Ray Scarpelli, dealer principal at Ray Chevrolet and Ray Chrysler Dodge Jeep Ram in Fox Lake, Illinois, for the 2023 TIME Dealer of the Year award was announced today by TIME.

Scarpelli is one of a select group of 48 dealer nominees from across the country who will be honored at the 106th annual National Automobile Dealers Association (NADA) Show in Dallas, Texas, on January 27, 2023.

The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted honors. The award recognizes the nation’s most successful auto dealers who also demonstrate a long-standing commitment to community service. Scarpelli was chosen to represent the Chicago Automobile Trade Association (CATA) in the national competition – one of only 48 auto dealers nominated for the 54th annual award from more than 16,000 nationwide.

“The lessons I have learned in the retail auto business and the people I have been lucky enough to know and work with have all contributed to the foundation of who I am today,” nominee Scarpelli said.

A 1984 graduate of Northwood University in Midland, Michigan, where he studied automotive marketing and management, Scarpelli has always been fascinated by cars. His father, Raymond Scarpelli Sr., owned a Chevrolet and Oldsmobile store, and Scarpelli relished his time there as a child.

“From an early age, my dad set an example that you should treat your customers the way you would want to be treated,” Scarpelli said. “Of course, it made all the sense in the world.”

Scarpelli later moved into the service department, was a lot attendant, washed cars and worked in the body shop. When it came time to look for a college, he let his passion for autos drive his decision. He chose Northwood University, where he could learn automotive marketing, management, accounting, service, parts and general operations – all the tools he would need to run a successful dealership. He also participated in hands-on activities, like the student-run outdoor Northwood University International Auto Show.

After college, Scarpelli worked in sales at his family’s Raymond Chevrolet Oldsmobile and continued his real-world education. He worked his way up through the ranks to become dealer principal of Ray Chevrolet and Ray Chrysler Dodge Jeep Ram in Fox Lake.

Over time, Scarpelli worked hard to grow the family business, adding key employees and improving customer satisfaction and service. He and his wife, Lisa, have two children who are now part of the dealership operation and the next generation to join the family business. He and his family also are active members of the Fox Lake community, and they reside in a town near the dealerships.

Scarpelli has held leadership positions for the CATA and served as chair of the Chicago Auto Show in 2019, overseeing the First Look for Charity black-tie gala. This popular fundraising event attracts car enthusiasts who also have a passion for philanthropy.

“In 2019, we raised $2.8 million for our charity partners, all of which are in the local area,” he said. “I was personally involved in selecting Catholic Charities of the Archdiocese of Chicago as a beneficiary.”

Other groups that benefitted from the successful event include Ann & Robert H. Lurie Children’s Hospital of Chicago, Boys & Girls Clubs of Chicago, Special Olympics Illinois and Turning Pointe Autism Foundation, among others.

Scarpelli is also proud of the partnerships he has created to support community nonprofit groups, organizations and schools. One of his favorites is the Big Play Program which rewards four local high schools by donating $25 for each “big play” achieved, including home runs, touchdowns, soccer goals and others.

“Over the years, we have donated more than $350,000 to support student athletes,” he said.

When the McHenry Outdoor Theater, a drive-in located in McHenry, Illinois, reopened following pandemic restrictions, Ray Chevrolet treated 350 families to tickets to a free movie. Scarpelli was also an early champion of the CATA’s USO Barbecue for the Troops fundraising initiative that, over the years, has collectively raised more than $1 million to support USO Illinois, local military and their families.

In addition, he hosts quarterly blood drives for Versiti Blood Center of Illinois; Toys for Tots toy drives; Christmas parties for children in-need; food drives to support Grant Township Food Pantry; and donates vehicles to driver’s education programs and to local police departments.

“Our greatest strength is our relationship with the community,” he said. “And our friends, customers and neighbors are an extension of our family.”

Dealers are nominated by the executives of state and metro dealer associations around the country. A panel of faculty members from the Tauber Institute for Global Operations at the University of Michigan will select one finalist from each of the four NADA regions and one national Dealer of the Year. Three finalists will receive $5,000 for their favorite charities and the winner will receive $10,000 to give to charity, donated by Ally.

In its 12th year as exclusive sponsor, Ally also will recognize dealer nominees and their community efforts by contributing $1,000 to each nominee’s 501(c)3 charity of choice. Nominees will be recognized on AllyDealerHeroes.com, which highlights the philanthropic contributions and achievements of TIME Dealer of the Year nominees.

“For over 50 years, TIME has been committed to recognizing the impact of automotive dealers on their communities with the TIME Dealer of the Year award," said Edward Felsenthal, editor in chief and CEO, TIME. "We are proud to continue the legacy of honoring these works of service with our partners at Ally.”

Doug Timmerman, president of dealer financial services, Ally, said, “Auto dealers across the country who are nominated for this award each year are committed to not only doing it right and leading in a rapidly changing automotive industry but to strengthening their communities through giving back. The TIME Dealer of the Year program celebrates dealers who are the role models of the retail auto industry for their continuous efforts to lift up and support their employees, customers and communities.”

Scarpelli was nominated for the TIME Dealer of the Year award by the CATA Board of Directors. For more information, visit TIME Dealer of the Year.

A couple weeks ago, the CATA hosted its first-ever Chicago Drives Electric program which brought together media, dealer members, policymakers and consumers to provide EV education and spotlight the critical role franchised dealers will play in the adoption of EVs. The CATA partnered with the Midwest Automotive Media Association to bring in national and local media members to hear from independent research firm, Escalent. In addition, every local TV broadcast station came onsite to learn and capture expert interviews and footage. According to Escalent’s 2022 EVForward Dealer DeepDive study, franchised dealers will remain a pivotal part of an EV intender's shopping experience. The DeepDive survey found that 74 percent of respondents prefer to buy an EV at a dealership, rather than from an auto manufacturer or third party. This research proves that the franchise dealership model works just as well for EVs as it does for traditional vehicles, a message the CATA made clear to media, policymakers and consumers. In addition, 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.

The following day, the CATA hosted its dealer members for a half-day session to gather EV business strategies and network with a handful of experts. Cars.com opened the morning with a discussion on “Customer Insights and Retail Strategies for the EV Future.” Following, a panel discussion focused on preparing dealers for the EV revolution and strategies on how to make the wisest business decisions to best adapt. A variety of topics were addressed ranging from how dealers can select the right EV charging solution/find efficiencies in the process, own their energy with solar, service considerations around BEVs and ideas for creating new business opportunities/sources of revenue into the future. Experts included Charge Enterprise VP OEM, Dealer and Commercial Development Mark Buzzell; Powering Chicago’s Gina Dooley; PLEMCo CEO Brad Rinehart; and Solar One Director of Commercial Development Michael Stonesifer.

Over the course of the weekend, the event opened to pre-registered consumers to test drive, experience and learn about the latest BEVs, hybrids and plug-in hybrids. Featured brands and vehicles included: Alfa Romeo Tonale; Chrysler Pacifica PHEV; Chevrolet Bolt EV; Chevrolet Bolt EUV; Ford F-150 Lightning; Ford Mustang Mach-E; Ford E-transit; Hyundai IONIQ 5; Hyundai Santa Fe PHEV; Hyundai Tucson PHEV; Hyundai Kona EV; Jeep Grand Cherokee 4xe PHEV; Jeep Wrangler 4xe PHEV; Kia EV6; Volkswagen ID.4; Volvo C40 Recharge; Volvo XC40 Recharge; Volvo XC60 Recharge PHEV; and Volvo XC90 Recharge PHEV.

In addition to putting interested parties behind the wheel of some of the latest EVs, the CATA brought 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 included Cars.com, Charge Enterprises, ComEd and Powering Chicago.

The event surpassed expectations: the CATA anticipated a range of 750-1,000 attendees. Over the course of the weekend, the event netted 947 total registered drivers and nearly 3,000 in-vehicle experiences, surpassing expectations. The buzz generated from the event carried over to social media; Chicago Drives Electric reached 4.5 million, according to initial results from media measurement firm Meltwater.

“We invited previous Chicago Auto Show ticket purchasers, in the form of one email, to preregister for their preferred date and two-hour timeslot,” said CATA Chairman JC Phelan. “We were shocked to find all the timeslots filled overnight! The response and interest were overwhelming, in a very good way, which is why we’re looking to enhance our indoor EV track at the Chicago Auto Show and incorporate elements of Chicago Drives Electric including consumer education and resources.”

“We’re planning to triple the size of our indoor EV track, adding more brands and vehicles, and building out the surrounding area with educational exhibits and panel discussions featuring industry experts,” said Chicago Auto Show Co-General Manager Jennifer Morand. “All of that rich content will translate well to social media where we’ll take in-person panel discussions and broadcast them live on our Facebook and Instagram channels, create educational Instagram Reels and TikTok videos, and partner with key influencers in the space to take over our social media channels throughout the show.” 

“Chicago Drives Electric validated to us the public’s enthusiasm to further their knowledge about EVs,” continued Morand. “There are many complexities associated with the topic, which is why personal service and education is needed now more than ever, and the Chicagoland new-car dealers are dedicated to assisting consumers in their EV journey.”

CATA counsel has received questions regarding mechanics' liens. The statute provides that the dealer must retain possession of the car in order for the lien to be in place. It does not provide for placing an actual lien on the title to the car or fifing a lien with the Recorder of Deeds Office. If the customer does not pick up the car and pay the bill within 90 days after the work has been completed, then the dealer can sell the car at a public or private sale after providing 30 days’ notice to the customer.

Problems arise when the customer who requested the service picks up the car but refuses to pay the bill. Under the statute, once the dealer voluntarily delivers the car to the customer, he loses the lien. The dealer's only recourse then Is to file a lawsuit to recover his expenses.

If the dealer is forced to deliver the car (for example, by law enforcement personnel) an argument may be made that the dealer did not "voluntarily" give up possession of the car and the lien remains in place. In this instance, the dealer would still have to file a lawsuit to enforce the lien.

Mechanics’ Lien Law & Foreclosure Process

Nearly all new-car dealerships are facing manufacturer-mandated EV charger installations over the next few months. This process can be both daunting and expensive. Powering Chicago, a partnership between the International Brotherhood of Electrical Workers (IBEW) Local 134 electricians and the Electrical Contractors’ Association (ECA) of Chicago and Cook County, wants to make that process slightly less daunting by providing an e-book that breaks down the process from design to implementation.

Download Powering Chicago e-book

[from NADA] NADA recently reminded members about potential legal issues that arise when dealers charge documentary or other fees to consumers who exercise an option to purchase at the end of their lease agreement when those fees are not provided for in the lease agreement. This issue continues to draw scrutiny, and NADA would like to remind dealers about the importance of consulting with their legal counsel about any contractual and regulatory obligations that could arise in connection with consumer fees charged with lease-end vehicle purchases.

In order to more fully explain the requirements and limitations that apply to fees that a dealer may charge a lessee who exercises an option to purchase, we have set forth below the relevant excerpt from NADA’s A Dealer Guide to Federal Consumer Leasing Act Requirements. As the excerpt generally explains –

The excerpt provides important details regarding these limitations. Dealers are encouraged to review with legal counsel their current procedures for handling options to purchase leased vehicles.

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.”