CATA News

Legislation to repeal the $10,000 cap on the value of traded-in vehicles passed out of the Illinois Senate on March 10 and awaits further consideration by the House.

Senate Bill 58 has added seven House co-sponsors but has not been called for a second vote. The deadline to pass a third reading in the House is May 28, days before the General Assembly is scheduled to adjourn its spring session. It then would have to be considered by the Senate.

Supporters of the measure should contact their state representatives to appeal for its passage.

 

Capping the trade-in credit increases the cost of new vehicles and used vehicles bought at retail. Votes thus far on SB 58 have been unanimous in support, and Gov. J.B. Pritzker has voiced his backing. The cap took effect in 2020 following moves to find funding for Pritzker’s multibillion dollar state capital infrastructure plan.

 

Under SB 58, infrastructure projects would instead be funded, in part, by increasing the sales tax charged in private vehicle sales. For instance, the current $390 sales tax on a 1-year-old vehicle sold privately for less than $15,000 would increase to $465. If the same vehicle sells for $15,001-$20,000, the sales tax would be increased from $750 to $850. The tax rates for private transactions haven’t changed in more than 30 years, and the modest increases are much less impactful than a trade-in credit cap, which costs consumers hundreds of dollars and harms dealers state-wide.

If the General Assembly passes the legislation, the change to restore the full trade-in allowance on First Division vehicles would take effect 120 days after the governor signs the bill. As currently written, the trade-in credit cap exempts Second Division vehicles. 

 

According to the Illinois Vehicle Code, a First Division vehicle is designed for carrying not more than 10 persons. A Second Division vehicle is designed to carry more than 10 persons; be used for living quarters; pull or carry freight, cargo or implements of husbandry; or be a First Division vehicle remodeled for use and used as a Second Division vehicle.

 

The Illinois General Assembly’s House of Representatives has days to advance legislation that would increase the booked time of repairs of vehicles under manufacturer warranty.

Legislation that originates in the House must clear that chamber by April 23 and then move to the Senate. House Bill 3940 was placed on the calendar for a second reading on April 8. Legislation must pass three readings in each chamber.

Dealers and their technicians should contact their representatives and urge support of the bill.

The legislation would amend the Illinois Motor Vehicle Franchise Act to define and expand upon how vehicle manufacturers are required to compensate franchised dealers for labor and parts associated with warranty work. It also would make changes to manufacturer calculations for time allowances for repair work, and guarantee compensation for vehicles under warranty equal to work performed out of warranty. 

Mechanics Local 701, the union representing area technicians at dealerships, is working with the CATA to advance the legislation. Technicians say many warranty jobs just can’t be performed in the booked time allowance, meaning they sometimes work without compensation.

Under House Bill 3940: "Adequate and fair compensation requires the manufacturer to pay each dealer no less than the amount the retail customer pays for the same services with regard to rate and time. Any time guide previously agreed to by the manufacturer and the dealer for extended warranty repairs may be used in lieu of actual time expended. In the event that a time guide has not been agreed to for warranty repairs, or said time guide does not define time for an applicable warranty repair, the manufacturer’s time guide shall be used, multiplied by 1.5."

 

The Illinois General Assembly’s House of Representatives has days to advance legislation that would increase the booked time of repairs of vehicles under manufacturer warranty.

Legislation that originates in the House must clear that chamber by April 23 and then move to the Senate. House Bill 3940 was placed on the calendar for a second reading on April 8. Legislation must pass three readings in each chamber.

Dealers and their technicians should contact their representatives and urge support of the bill.

The legislation would amend the Illinois Motor Vehicle Franchise Act to define and expand upon how vehicle manufacturers are required to compensate franchised dealers for labor and parts associated with warranty work. It also would make changes to manufacturer calculations for time allowances for repair work, and guarantee compensation for vehicles under warranty equal to work performed out of warranty. 

Mechanics Local 701, the union representing area technicians at dealerships, is working with the CATA to advance the legislation. Technicians say many warranty jobs just can’t be performed in the booked time allowance, meaning they sometimes work without compensation.

Under House Bill 3940: "Adequate and fair compensation requires the manufacturer to pay each dealer no less than the amount the retail customer pays for the same services with regard to rate and time. Any time guide previously agreed to by the manufacturer and the dealer for extended warranty repairs may be used in lieu of actual time expended. In the event that a time guide has not been agreed to for warranty repairs, or said time guide does not define time for an applicable warranty repair, the manufacturer’s time guide shall be used, multiplied by 1.5."

 

CATA webinar

"A review of the Illinois Motor Vehicle Advertising Regulations"

9:30-11 a.m. Tuesday, May 4

 

Join the Better Business Bureau of Chicago and Northern Illinois for a webinar that will review the state’s guidelines which must be adhered to when advertising the sale of vehicles. The BBB monitors all motor vehicle advertisements for their compliance with the regulations. Dealers whose ads are not compliant are notified, and if the ads are not corrected, a matter is forwarded to the attorney general’s office.

 

Some of the recent infractions the BBB has seen include:

 

• Offering free gifts and other incentives in relation to a vehicle purchase or lease.

• Including limited rebates, for which not all consumers qualify, in a vehicle’s selling price.

• Advertising specific trade-in allowances or a range of amounts for trade-ins.

• Comparing advertised prices to nationally recognized price guide books without identifying the books.

• Including any one of five "triggering terms" in an ad without also including other clear and conspicuous disclosures.

 

The 60-minute review will be followed by a 30-minute Q&A session. Register here for the webinar.

 

Highland Park Ford, McCarthy Ford (Chicago), and River View Ford (Oswego) are among the 2020 winners of Ford Credit’s Partners in Quality award for achieving high customer satisfaction and loyalty.

 

McGrath Acura of Westmont was named a member of Acura’s 2020 Precision Team, making the dealership a 19-year recipient of the award, and Arlington Acura in Palatine became a 10-year recipient of the award.

Honda’s 2020 President’s Award winners include Continental Honda in Naperville and Valley Honda in Aurora. It was Continental’s fifth consecutive win.

 

Muller’s Woodfield Acura is a gold medal winner of the Acura Environmental Leadership Award for reducing its energy consumption by 30%.

 

Norman Kraus, 87, whose Mopar fans knew simply as "Mr. Norm," as he and his dealership were synonymous with Dodge performance in the 1960s, died Feb. 26.

Mr. Kraus founded Chicago’s Grand Spaulding Dodge in 1962, just as the muscle car era was set to explode. The strategy was to focus on performance, and Grand Spalding Dodge quickly became the Mopar community’s prime source for all manner of go-fast parts. He would champion Dodge performance both on the street and at NHRA dragstrips.

As the muscle car era waned, Mr. Kraus sold Grand Spaulding Dodge in 1977, and the dealership closed for good in the 1980s. Mr. Norm still made the scene over the next several decades, appearing at car shows, races, and various automotive events.

Survivors include a daughter, Lori; sons Lee and Lyle; eight grandchildren; and four great-grandchildren. Memorials appreciated to the Wounded Warrior Project.

 

Highland Park Ford, McCarthy Ford (Chicago), and River View Ford (Oswego) are among the 2020 winners of Ford Credit’s Partners in Quality award for achieving high customer satisfaction and loyalty.

 

McGrath Acura of Westmont was named a member of Acura’s 2020 Precision Team, making the dealership a 19-year recipient of the award, and Arlington Acura in Palatine became a 10-year recipient of the award.

Honda’s 2020 President’s Award winners include Continental Honda in Naperville and Valley Honda in Aurora. It was Continental’s fifth consecutive win.

 

Muller’s Woodfield Acura is a gold medal winner of the Acura Environmental Leadership Award for reducing its energy consumption by 30%.

 

The family of renowned automotive enthusiast, racer, and entrepreneur John Weinberger has teamed with the TechForce Foundation to offer a series of scholarships to benefit students who aspire to follow in his footsteps. Applications must be submitted by April 30. 

The John Weinberger Driven to Care Legacy Scholarships support students with awards of up to $10,000 across a broad spectrum of automotive career disciplines: Automotive Engineering; Vintage Automotive Restoration; Automotive Dealership Management, Marketing and Communications; and Automotive Technician. 

The scholarship offerings reflect the interests, experiences, and expertise of the late John F. Weinberger, who lived in Naperville and in Austin, Texas. He was a legendary force in automotive circles who built Continental Motors Group — one of the nation’s largest dealership groups — and enjoyed a lifetime of driving, racing, and tinkering with cars.

Students who meet the following criteria are eligible for awards:

 

• SAE-Chicago section automotive students enrolled in the engineering program at the University of Illinois-Chicago or Northern Illinois University; 

• McPherson College (McPherson, Kansas) students pursuing historic automotive technology;

• Lyons Township (Illinois) High School automotive students enrolled in a post-secondary school to pursue a career in the automotive industry;

• Illinois or Texas students pursuing a career as an automotive technician and enrolled in any local community college that offers an automotive program or Universal Technical Institute;

• Northwood University students pursuing skills in car dealership management, marketing and communications.

The scholarships are offered in partnership with the TechForce Foundation, a nonprofit 501(c)(3) organization whose mission is to champion students to and through their education and into careers as professional technicians. To apply for one of the scholarships, visit www.DrivenToCare.org.

Recipients will be selected by TechForce representatives and a group of John’s "car buddies" in the Chicago and Austin areas known as the "lunch bunch."

"We want young people to dream what they want to dream," Lisa Weinberger, John’s wife, said about the creation of the scholarships. "John was able to turn his passion into his profession and was just so positive in everything he did. He measured success in smiles. He glowed. 

"I hope to see a glimmer of my husband in each and every one of these students. That would fill my heart with his light."

A respected and influential force in the industry, John Weinberger served several terms on the boards of the Chicago Automobile Trade Association, the Illinois Automobile Dealers Association, and the American International Automobile Dealers Association. He also enjoyed racing and earned numerous podium finishes while competing in Sports Car Club of America events during the 1960s. His exploits led to his induction into the Road Racers Drivers Club, where he joined an exclusive group of famed drivers. He also was a board member of the SCCA and an active member of various vintage racing clubs, including the Sportscar Vintage Racing Association, the Veloce Racing Association, the Vintage Sports Car Drivers Association, and Historic Sportscar Racing, LLC. 

He continued racing until the age of 84, even taking to the track after he died at age 88 on Sept. 12, 2020, as Lisa Weinberger took the wheel of the hearse to lead a first-of-its-kind, high-speed funeral procession around the Circuit of the Americas race track in Texas.

The scholarships continue John and Lisa’s history of giving back to the community, which began with the Continental Motors Group "Driven to Care" car giveaway program. The program has donated nearly 100 refurbished cars to deserving individuals who have overcome challenges such as homelessness, substance abuse, and physical abuse. 

"John wanted car dealers to be seen in a different light," said Lisa Weinberger. "If every dealer in the country followed his example of reaching out to the community, of mentoring young people, and of providing networking opportunities, we could change a lot of things for the better."

To learn more about John Weinberger and his history, visit www.johnweinbergerlegacy.com.

 

Car dealer Brad Sowers is spending money to prepare for the coming wave of new electric models from General Motors. He is installing charging stations, upgrading service bays and retraining staff at his St. Louis-area dealership to handle the technology-packed vehicles.

But when he considers how many plug-in Chevy Bolts he sold last year — nine, out of the nearly 4,000 Chevrolets sold at his Missouri dealerships — it gives him pause.

"The consumer in the middle of America just isn’t there yet," when it comes to switching to electric vehicles, he said, citing the long distances many of his customers drive daily and a lack of charging infrastructure outside major cities.

As auto executives and investors buzz about the coming age of the electric car, many dealers say they are struggling to square that enthusiasm with the reality today on new-car sales lots, where battery-powered vehicles in 2020 made up fewer than 2% of U.S. auto sales.

Most consumers who come to showrooms aren’t shopping for electric cars, and with gasoline prices relatively low, even hybrid models can be a tough sell, dealers and industry analysts say.

Automakers are moving aggressively to expand their electric-vehicle offerings with dozens of new models set to arrive in coming years. Some, like GM, are setting firm targets for when they plan to phase out gas-powered cars entirely.

Many dealers say that puts them in a delicate spot: They are trying to adjust, but remain unsure whether and how fast customers will actually make the switch. About 180 Cadillac dealers, or roughly 20%, decided to give up their franchises rather than invest in costly upgrades that GM has required to sell electric cars. A GM spokesman said the company expected some Cadillac dealers to opt out and is pleased that the roughly 700 remaining share its all-electric goals.

Past attempts by car companies to expand electric-car sales have largely flopped, saddling retailers with unsold inventory. Even now, some dealers say they are reluctant to stock electric models en masse.

"The biggest challenge is that dealers have a bit of ‘boy who cried wolf’ syndrome," said Massachusetts dealer Chris Lemley.

Car companies have promised for years to make electric cars mainstream but produced only low-volume, niche models, he said. He recalls Ford rolling out an all-electric Focus that sold poorly and stacked up on his lot. It was discontinued in 2018.

 

"So when we are told, ‘This time, we really mean it,’ it’s easy to be skeptical," Lemley said.

 

Some shoppers also are unsure. Joe Daniel, an energy analyst at the Union of Concerned Scientists, said he was determined to buy an electric car, but eventually abandoned his effort after realizing there weren’t enough public charging stations near his apartment in Washington, D.C. Without a place to plug in, the purchase made little sense, he said.

 

"For EVs to take off, they need to be as convenient as gas-powered cars — that’s the whole point of this big purchase," Daniel said.

 

To solve problems like this, President Biden has said he wants to spend billions of dollars to upgrade the country’s charging infrastructure as part of a push to incentivize battery-powered cars.

 

Ford, GM and other major car companies say they are confident in their new electric-vehicle offerings and are training dealers to sell and service them. Still, some auto retailers say they worry about the long-term implications for their business.

 

A Cook County dealership in March reported receiving paperwork from a Florida company which sells cleaning supplies with indications of product orders to the company worth more than $1,100.

The dealership said it never ordered the supplies from Nationwide Chemicals, in West Palm Beach, Florida, and that it has never purchased from the company. And while both pieces of the paperwork are stamped "Order Form" in the top right corner, both just as easily resembled invoices that needed to be paid.

 

The Illinois attorney general’s office reports that businesses and government agencies have received invoices for expensive chemical products, such as cleaning supplies. When some businesses tried to send the product back, the senders refused the shipments.

Federal law prohibits any mailing which is "in the form of, and reasonably could be interpreted or construed as, a bill, invoice, or statement of account due" but is, in fact, "a solicitation for the order by the addressee of goods or services," unless the mailing includes the following notice:

"This is a solicitation for the order of goods or services, or both, and not a bill, invoice, or statement of account due. You are under no obligation to make any payments on account of this offer unless you accept this offer.

 

"Federal law requires that the notice (or one like it) be printed on the face of the mailing in "conspicuous and legible type in contrast by typography, layout, or color with other printing on its face."