GNYADA November 2016 Newsletter

To read these stories and get the latest news online, visit the GNYADA website at www.gnyada.com

For Dealer Principals / General Managers / Sales Managers The Newsletter A Publication of Greater New York Automobile Dealers Association

Keep the Dealer’s Voice Strong in D.C. Contribute to the NADA PAC

NOVEMBER 2016 Volume 26, Issue 7

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HIGHLIGHTS

NADA's Political Action Committee repre- sents the interests of franchised new car dealers, by supporting candidates for federal office who understand the important role played by automobile dealers in this coun- try. The PAC is funded by contributions from NADA members; this year, we must keep these donation numbers strong. NADA is engaged in several active legisla- tive battles, the outcomes of which will have major implications for dealers. These include: Stopping the CFPB from seizing control over consumer vehicle financing. The Bureau has been pushing for this authori- ty ever since it issued a flawed guidance bulletin, which falsely alleged rampant discrimination in the lending process. Opposing recall legislation that catego- rizes all motor vehicle recalls as effec- tively equal, rather than accounting for factors such as safety, diminished value of consumers’ vehicles, and holding man- ufacturers responsible for supplying the parts for repairs made by dealerships. The above efforts, and many others taken on by NADA, seek outcomes that benefit all parties in the car-buying process. In a recent communication about the 100-year anniversary of NADA, Chairman Jeff Carlson enunciated the negative ripple effects caused by constraining and over- regulating the operations of dealers, and how these effects are most felt by con- sumers:

Selling to Minors: Here are the Rules page 3

The Dos and Don’ts of Email Marketing page 4 Check the OFAC List Before Every Sale page 5 FTC Increases Do-Not-Call Registration Fees page 7 5 Off-Limits Questions in Job Interviews page 8

“NADA has worked tirelessly to educate government officials and the media about the dealer business and how we provide effi- cient and cost-effective services to the driv- ing public. We've had endless correspon- dence, roundtables and even hearings with our federal regulators so they can under- stand how their decisions impact this indus- try and the customers whom we serve.” Keep GNYADA a Leading Contributor! We are proud that Greater New York has long held a top-ten spot among dealer asso- ciations throughout the U.S., in terms of PAC contributions. Both we and NADA are extremely grateful to the GNYADA mem- bers who have donated over the years. With the need for a strong national presence as important as ever, we encourage our mem- bers to continue supporting the cause. To join NADA or to make a donation to the NADA PAC, please contact Jennifer at the Association: jennifer@gnyada.com / 718.746.5900. Learn more at: nada.org/NADAPAC

Above Ground Storage Tank Alert page 9

Tire Labeling Reminder page 10

The Newsletter is published by GNYADA, a not-for-profit organization representing franchised automobile dealers in the New York metro area. 18-10 Whitestone Expressway Whitestone, New York, 11357

Dealer Hotline 718.746.5900

www.gnyada.com

The Newsletter • November 2016 1

GNYADA Discusses 2017 Legislative Agenda in Statewide Meeting of Dealer Associations 2

issues, prior to the start of the Session in January.

bear the responsibility nor the financial costs for defects caused by manufacturers. Finding a solution to minimize dealers’ liability will be a high priority. Vicarious Liability: Currently, dealers are legally responsible in the event that a customer gets in an accident in a convenience or loaner vehicle that the dealership has provided. In many cases, dealers are required to provide these vehicles, per their franchise agreements. We will continue looking into legislative approaches that remove dealers’ liability. Brokers: Building on the successful adoption of a law (A10081 Abbate / S6623 Golden) increasing penalties for deceptive practices by auto-brokers during the 2016 Session, the associations intend to continue pushing for further reforms related to auto- brokers in 2017.

GNYADA recently met with the NYS Automobile Dealers Association, ENYCAR, and the regional associations from Rochester, Syracuse, and Buffalo to develop an agenda for the 2017 Legislative Session, based on issues confronting auto dealers throughout New York. President Mark Schienberg, Chairman Nick Toomey, Immediate Past Chairman Robert Vail, and Government Affairs Committee Chairman Brian Miller, traveled to Syracuse, NY, to attend on behalf of GNYADA. The highly productive meeting laid out a blueprint that will help Associations prepare to advance an agenda during the upcoming Legislative Session. Having this jointly agreed upon agenda in place allows the associations to work with dealers to set up meetings with local legislators and begin discussing these

The following items were discussed:

Doc Fee Increase: We were last successful in increasing the doc fee in 2008. Since that time, the fee has remained stagnant at $75. Dealers deserve to recapture their costs for providing this state service to consumers. Recalls: Recalls remain an important issue for all New York dealers, with the Attorney General’s Office having issued subpoenas throughout the state, which are still open and pending. The New York City DCA has issued similar subpoenas as well. GNYADA’s position on this matter is shared by other Associations in New York State: Manufacturers are responsible for defective vehicles, and franchised dealers should not (ADA), based on claims that their websites are unusable for people with vision disabilities. Websites must be configured in a way that allows visually impaired users to utilize software that reads these pages aloud to them. There were 45 website accessibility lawsuits filed in 2015, according to the Bureau of National Affairs (BNA), and the trend has continued in 2016. This has caught the attention of the Department of Justice, which is working on releasing regulations and specific standards that retailers will

Is Your Website Usable for the Visually Impaired?

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need to meet. (Those standards may not be released until 2018.)

In the meantime, it is important for retailers (including dealerships) to assure that their websites comply with the standards of the Web Content Accessibility Guidelines (WCAG), which make sure websites are accessible to users with various disabilities. This can reduce the chance of facing an ADA lawsuit.

Retailers are facing an increased number of lawsuits related to the Americans with Disabilities Act

The WCAG guidelines can be found at: www.w3.org/TR/WCAG20/

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016

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Certilman Receives TIME Dealer of the Year Nod

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the Executive Committee for the past two years, Lee is one of a select group of 55 dealer nominees from across the country who will be honored at the 100th annual NADA Convention & Expo in New Orleans, next January. Lee’s passion for education and training made him a natural selection for GNYADA’s Education Committee. In 2010, he helped initiate a program with the Center for Automotive Education & Training and CUNY Queensborough Community College, to help workers displaced by an eminent domain initiative. Lee also contributed to the development of the Center more than a decade ago, and has since been instrumental in pushing for increased electric and hybrid training there.

adult — preferably a parent or guardian — cosign the buyer’s or lease order and the bill of sale/lease. Service: The same cosigning rule applies to service, repairs, or parts contracts offered to minors. It’s prudent to require a signature or telephone approval (even if it means calling them at work) from a parent or guardian before performing repairs that a minor requests. Rentals: While New York law prohibits age discrimination in renting vehicles (as long as insurance is available), there is no requirement to rent to someone who is under 18. in local high schools. He also works with the National Automotive Technicians Education Foundation (NATEF), and the Automotive Youth Educational Systems (AYES) automotive technician program which provides technical education and real- world work experience in dealerships. As a third-generation automobile dealer in New York, Lee’s family and their dealerships have a long history of giving back to their communities. Lee is a generous supporter of the Alzheimer Association, American Cancer Society, Juvenile Diabetes, and Syracuse and Tulane Universities. Through Nardy Honda’s community outreach program, he donates time and funds to 32 local educational and charity organizations. GNYADA congratulates Lee on this prestigious and well-earned recognition.

Lee Certilman, President and Dealer Principal of Nardy Honda in Smithtown, has been nominated for 2016’s TIME Dealer of the Year award. A twelve-year GNYADA Board Member, who has served on Lee Certilman, President and Dealer Principal, Nardy Honda

Lee is an active mentor for students coming through educational programs

5 Selling to Minors: Here are the Rules

When selling a car to a minor, there are precautions to take that will help avoid disputes. Minors — anyone under the age of 18 — are treated differently when entering into a contract. They always maintain the right to void that contract, even after they are no longer a minor. GNYADA recommends the following steps in transactions with minors: Registering and Titling: The DMV permits a minor to title and or register a vehicle in his or her own name, provided he/she has a valid driver’s license. However, if a vehicle is financed or leased, check with the lender first to see if they require an adult cosigner’s name on the title as well as the contract.

Buying / Leasing: As mentioned, buyers or lessees who are under 18 when they sign a contract may cancel it and obtain a full refund at any time. To prevent such a business disruption, make it dealership policy to have an

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016 3

The Dos and Don’ts of Email Marketing All electronic communications must be CAN-SPAM-compliant

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Provide easy opt-outs. There must be an explanation of how the recipient can unsubscribe from your dealership’s email list. The opt-out must be easy to recognize, read, and follow. You must also honor unsubscribe requests within 10 business days and be able to process them for at least 30 days after sending your message. Monitor what contractors do on your behalf. You are responsible for any CAN-SPAM Act violations within commercial emails that advertise your dealership, even if you use an outside company to conduct your electronic marketing.

identify the person or business initiating the message.

If your dealership's marketing strategy involves email

communication, those electronic messages must comply with the federal law that establishes rules for commercial email, known as the CAN-SPAM Act. This Act applies to any email with the primary purpose of advertising or promoting a product or service. (It even covers business- to-business email.) The FTC can enforce penalties of up to $16,000 for each separate email in violation of the CAN-SPAM Act. Here are the primary requirements: Avoid false/misleading “From” info. This means no phony email addresses. The “From” field must

No deceptive subject lines. The subject line must accurately reflect the message’s content. Identify the message as an ad. Disclose this clearly and conspicuously. The communication cannot be masked as a personal correspondence, in the hope that more people will open/read it. Include your physical address. This means your postal address (or P.O. box) registered with the U.S. Postal Service, or a private mailbox you’ve registered under Postal Service regulations.

The Breakdown on Holiday Pay Put policies in writing!

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Salaried/Exempt Employees

Your obligation to pay an employee for days off during the holidays will depend on the classification of that employee. The following describes the requirements for each worker classification:

Employees who fall under the Administrative, Executive,

Professional or Highly Compensated exemptions receive full salary for any week in which they perform any work, regardless of the number of days/hours worked. There are some exceptions, but holidays are not among them.

Hourly employees

Pay hourly employees for all hours actually worked. If a holiday does not fall on a scheduled workday, no pay is required for hourly employees (unless the dealer’s policy or a collective bargaining agreement says otherwise). If the holiday falls on a workday and the employee worked during it, pay them for those hours.

Collective Bargaining Agreement

If your dealership offers paid holidays as a benefit — such as the day after Thanksgiving or the day after Christmas — state law requires you to inform employees of the policy. Memos, bulletin board posts and pages in your employee handbook are all acceptable ways to do this.

Follow the terms of the agreement for all employees it covers.

For any other questions regarding holiday pay, please call Sue Bieber at the Association: 718.746.5900

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016

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Become a New York Cares Coat Donation Site More than 100 Dealers Have Already Signed Up!

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With temperatures poised to dip below freezing, thousands will soon face the struggle to keep themselves and their families warm. To help these

individuals in need, GNYADA has again teamed up with the New York Cares Coat Drive, for the fifth straight year. Join the mission today, with just three easy steps: 1. Register your dealership as a drop-off site by visiting www.gnyada.com/coats and completing a brief form. 2. Designate an area (or areas) in your dealership where customers and staff can drop off coats. We will provide posters to designate your dealership as a drop-off site as well as garment bags to store coats. 3. At the end of the coat drive, call GNYADA to have your donations picked up and delivered to New York Cares ’ headquarters. How do I consult the SDN list? Dealers can crosscheck the current list on treasury.gov . What if I come up with a match? Receiving a match requires dealers to do a little more research in order to confirm. For example, does your customer reside in the same area as the person on the SDN list? If not, it may be a false hit. If your research makes you reasonably confident that your customer is the same individual flagged on the SDN list, call OFAC's hotline at 1.800.540.6322. Fines & Penalties Criminal penalties may result from a failure to consult the SDN list, with

For the last four years, GNYADA has been New York Cares ’ largest single corporate donator of coats, generating great media coverage for participating dealerships and for the Association. The 2017 Farmers’ Almanac predicts an exceptionally colder winter than last year, particularly in the Northeast. Our coat-collection efforts continue to be as necessary as ever. Last year, with 100+ dealerships participating, we collected an astounding 7,300 coats. With your help, we know we can break that record. For any questions, contact Jennifer Berman: Jennifer@gnyada.com / 718.746.5900 ext. 235.

9 Check the OFAC List before Every Sale

fines ranging from $50,000 to $10 million. Willful violations can mean imprisonment, with sentences rang- ing 10 to 30 years. Civil penalties range from $250,000 to twice the amount of each underlying transac- tion, up to $1,075,000.

Federal law requires dealers to check every customer’s name against the Specially Designated Nationals and Blocked Persons List ( SDN List ), maintained by the Treasury Dept’s Office of Foreign Assets Control (OFAC). Failure to do so can result in drastic criminal penalties. When do I have to run an OFAC check? You must run the customer’s name through the SDN list for every sales, parts, or service transaction, regard- less of the customer’s payment method. Lending institutions should also check the OFAC list before approving a loan, but that does not relieve the dealer of this obligation.

GNYADA vendor provides a solution VerantID, a GNYADA Dealer

Discount Club vendor, can help you comply with your obligation to check the OFAC list, simply by scanning your customer’s license. For informa- tion about signing up with VerantID, call Jennifer Berman at 718.746.5900.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016 5

F&I Compliance Tip: Save Your “Pencils” 10 AlliedMember Memo

attorneys that all relevant specifics were explained to the customer, as their deal progressed. Deal Jacket Best Practices Consistently use a “first pencil”. This hypothetical payment and rate sheet reflects the average financing terms for most customers, and is an important demonstration of the process' starting point. The customer sees what the baseline payment figure is, prior to any customization based on their credit and lender responses. Deal jackets should contain copies of every document given to or received from the consumer. That includes all “pencils”, “four squares” and other informal documents illustrating how the deal was formed. This approach demonstrates how the deal

unfolded and is an important step towards transparency.

A “pencil” is a proposal that a salesperson uses with buyers, to outline deal scenarios on the way to the final agreement. To help with F&I compliance, dealerships should automatically save records of these “pencils”, in every customer’s deal jacket. Why it Matters The Dodd-Frank Act of 2010 added a new category of “abusive” trade practices that could take advantage of a customer’s lack of understanding. Furthermore, the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) have emphasized the need for transparency in consumer financing of automobile purchases and leases. Saving “pencils” can be a valuable tool in preventing misunderstandings, and (if needed) proving to auditors, regulators, or

Put all deal information in one searchable and secure location. The benefit here goes beyond mere convenience. Being consistent in storage and security provides peace-of-mind and creates efficiencies, just in case auditors come calling. This article was contributed by Dealertrack, a provider of digital solutions in automotive retail, and a GNYADA Allied Member. Dealertrack, a Cox Automotive brand, helps dealerships defend against potential loss, protect customer information and maintain compliance with federal and state regulations. For more inform- ation about the F&I compliance solutions offered by Dealertrack, please contact the Association.

21st Century Data Storage for Dealers 11

and use at AutoTrieve.com . Data is automatically backed up, and backup disks are provided monthly. To learn about AutoTrieve or to schedule a demonstration, please contact Jennifer at the Association: Jennifer@gnyada.com.

discount. For optimal convenience, they offer two data storage options:

Dealerships can do their document scanning and archiving in-house. (Rates are between $619 and $659 per month, based on equipment rental.) or: AutoTrieve can pick up documents from the dealership and do the scanning and archiving work at their New Jersey headquarters. (Rates are 50 cents per Repair Order or three dollars per Deal Jacket.)

All dealership departments generate their share of sensitive paperwork, and the safe storage of these documents is crucial. Now, GNYADA members have access to secure, inexpensive document archiving, through our new Dealer Discount Club (DDC) vendor, AutoTrieve. AutoTrieve's web-based document scanning service can be securely accessed 24/7. As a DDC vendor,

their services are available to GNYADA Members at a 25%

Documents are stored safely for the dealership’s exclusive online retrieval

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016

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Ten Tips for Spotting Flood-Damaged Vehicles

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7. Check engine compartment crevices for dirt or mud. 8. Perform a New York safety inspection — it could reveal corroded wires. 9. Carefully examine the electrical system. 10. Check the undercarriage for excessive rust. NY Damage Disclosure Law New York State requires presale dis- closures, whenever a vehicle being sold has been damaged by a natural disaster. If the vehicle’s mechanical or electrical systems are inoperable or unable to pass inspection, it cannot be sold without disclosing that damage in writing to any buyer, dealer or consumer. That disclosure must state the nature and extent of the damage, as well as the date and location where it occurred. (Failure to provide this disclosure is a Class B Misdemeanor.)

If a new vehicle requires repairs for physical damage (with a retail value in excess of 5% of the MSRP), deal- ers and manufacturers must disclose that in writing to any prospective buyer. (The 5% is based on the retail charges for parts and labor at a deal- er’s stated labor rate.) Otherwise, the buyer has a four-month window in which they can cancel the sale and receive a full refund. it arrives at your dealership. The National Insurance Crime Bureau also allows free search of the Flood Vehicle Database. (The information in the database comes from insurance companies, salvage yards and state and local authorities.) Carfax.com can help determine the history of a particular vehicle before

The heavy floods that ravaged Louisiana this past summer reported- ly affected as many as 80 dealerships, damaging potentially tens of thou- sands of cars. Last month, Hurricane Matthew caused flooding throughout the southeastern U.S., the damage from which is still being assessed. According to Carfax.com, roughly 50% of all vehicles exposed to floods eventually return to market, as own- ers or salvagers attempt to resell them as undamaged. In the event that some of these vehi- cles make their way to our region, GNYADA recommends the following tips for detecting flood damage: 1. Sit in the car with the doors closed and see if you notice a moldy smell. 2. Check carpeting or upholstery for water stains in unusual places. 3. Be suspicious of an older car with new carpeting. 4. Check areas surrounding light fixtures for moisture. 5. Note if you find rust or dirt in unusual places. 6. Scan both the interior and exteri- or for corrosion or waterlines.

FTC Increases Do-Not-Call Registration Fees

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area code of data will increase to $61 (from $60), and the maximum amount that will be charged to any single entity for accessing area codes of data will increase to $16,714 (from $16,482). Dealers who wish to have access to only five or fewer registered area codes from the DNC registry are exempt from the fee requirement, but must still register with the FTC.

Dealerships accessing six or more area codes must pay the fee when they renew their accounts. For more information about the Telemarketing Sales Rule, please visit the following website: https://www.ftc.gov/tips- advice/business- center/guidance/complying- telemarketing-sales-rule.

Any phone number a dealer is calling for telemarketing purposes must not be included on the National “Do-Not- Call” (DNC) Registry. As a reminder, any dealer seeking to access the DNC list must first register with the Feder- al Trade Commission (FTC) and pay any associated fees that apply. The FTC recently increased its fees to register for access to the DNC list, as of October 1, 2016. The cost for each

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016 7

14 5 Off-Limits Questions in Job Interviews

Our GNYADA Dealer Hotline receives frequent calls asking what questions employers are permitted to ask job appli- cants. Not only are these rules complex, they also change regularly. The key is to avoid interview questions that may — directly or indirectly — lead to discrimination against the interviewee. Per state and federal law, asking these ques- tions (or using the wrong wording) may subject the employer to litigation.

Below is a partial list of off-limits inquiries that employers mistakenly ask, but which must be avoided:

1. Are you married? This personal information does not correlate to one’s ability to perform job tasks. Answers may also inad- vertently reveal even more detailed personal informa- tion, such as sexual orientation, inclination toward having children, or marital history (divorce, etc.). It doesn’t matter if the dealership seeks to create a “family atmosphere”; asking this question is imper- missible. Even asking for emergency contact infor- mation may only be done post-hire! 2. How old are you? This question is blocked to prevent age discrimina- tion. As long as the applicant can perform the duties of the position, age may not be a factor in hiring them. Similar questions that may nudge the inter- viewee to reveal their age are also banned, such as “What is your year of birth?” or “What are the ages of your children?” The only age-related question interviewers may ask is, “Are you over the age of 18”? 3. Of what country / countries are you a citizen? The only question relating to citizenship that inter- viewers are permitted to ask is whether the applicant is eligible to work in the U.S. Questions relating to

4. To what organizations / societies / clubs do you belong? Answers to such questions threaten to expose a wealth of private information: religion, politics, social background, etc. The New York Legal Activities law prohibits employers from making decisions based upon an employee’s lawful off-duty conduct. Employers may only inquire about an appli- cant's membership in any organizations that the applicant feels could affect their ability to perform the job. For example, if their group meets during dealership workhours. 5. Have you ever been arrested? Relying on arrest records has been deemed discrimi- natory toward minority job applicants. Interviewers may be able to ask, “Have you ever been convicted of a crime?” However, that can only be asked outside of New York City, per Ban the Box Act, passed by the City Council in June of 2015. Even outside the City, dealers must demonstrate that they considered the 8-factors of the New York Corrections Law , which include the age of the individual at the time of the conviction, the passage of time and, most impor- tantly, the link between the conviction and the pro- posed job duties.

countries of origin or immigration status are prohibited. (It is also unlawful to ask what an applicant’s native language is.)

GNYADA recommends that dealers prepare boiler- plate lists of questions for separate departments

(Service, BDC, etc.), to ask when hiring positions for each. Having standardized lists shows that all applicants for similar positions

are treated equally and also cuts down on the chances that an off- limits question will be asked.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016

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Beware of Misleading Job Applications

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teer or extracurricular capacities.

tion’s records department for the can- didate’s period of attendance and their graduation date; all you’ll need to provide is their social security number. Use your network for independent confirmation. As long as you’re not violating a request that you not reach out to a certain person, consult trust- ed colleagues who may have crossed paths with the candidate. The need for thoroughness when researching aspiring hires is ongoing. The above tips and practices will help dealers to identify falsified work histories and resumes, and, most importantly, stop bogus job-seekers from doing more harm if they’re hired.

County Health Departments are con- ducting random compliance inspec- tions of dealerships’ above ground storage tanks (AST). Dealers are required to register and regularly inspect all ASTs. Several dealers have already received Notices of Violations and have been assessed fines of up to $10,000 per tank, depending on the severity of the violation. Register each tank with the County Dept. of Health (in NYC register your tanks with the New York State Department of Environmental Conservation. ) Label each container Color code each fill port Maintain monthly, quarterly, and annual inspection logs Conspicuously post your operating permit All dealers are required to: A study commissioned by the Society for Human Resource Management found that 46% of all resumes con- tain at least one untruth and that more than a quarter of applicants pro- vide false references. Considering the lengths to which dishonest applicants will go to get hired, it’s critical for dealers to be vigilant in checking all resume information and following up on suspicious discrepancies. Always respect when an applicant requests that you not contact their current employer. But, in those cases, calling at least two previous employ- ers is a must. If the applicant hasn’t had two prior jobs, find people who’ve worked with them in volun- Here are some effective cross- checking techniques:

Reference falsifiers have been known to provide cellphones (or other direct lines) for their references, who are actually “friendly” former colleagues willing to lie on their behalf. In addition to calling the numbers provided on the application, dealers should contact applicants’ previous dealership(s) directly. Your instincts will likely tip you off when this scam is being pulled. Does the number look like a dealership number? Did the applicant provide a 917 area code, claiming it to be a work line?

When it comes to checking educa- tion histories, simply ask the institu-

Above Ground Storage Tank Alert 16

On a monthly basis dealers should check the following:

Quarterly inspection requirements:

Hoses, piping, and tank for leaks Functionality of tank leak detection system Functionality of overfill alarm Water in interstice (space) Water in tank Open the dispenser – check for leaks Exterior condition

Vents/emergency vents Spill fill containment, labeling

Annual inspection requirements:

Site drainage (check for changes that would affect spill pathway) Emergency vents, o-rings, and gaskets Tank supports and foundation GNYADA will post the inspection report form for each county and New York City on the dealer page of www.gnyada.com . Call the dealer hot- line, at 718.746.5900, for additional information.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016 9

Tire Labeling Reminder

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How to relabel:

A dealer may occasionally need to relabel the vehicle, when accessoriz- ing it before sale. This is the case in the following conditions: Whenever a dealer changes the vehicle’s tires before selling it. If the replacement tires are a differ- ent size or have a cold inflation pressure different from the origi- nal, affix a new label. If, before the first sale, parts or accessories have been added to a vehicle that increase the vehicle’s curb weight by 100 lbs. or 1.5% (whichever is less). Dealerships may use any reasonable means to calculate the weight of any add- ons, including scales or reference to shipping weight. A fair conclusion is that the Military Lending Act does not affect car deal- ers who, when they sell vehicles to service members on credit, take a lien, or record a lien for the finance source, on the vehicle financed. Some lenders have reviewed the MLA pro- visions, and have raised some con- cerns about whether financing nega- tive equity and F&I products in con- nection with the sale of a vehicle are exempt from the MLA. The problem is that if they are not exempt from the MLA there are limi- tations on interest, a required written and oral disclosure, and prohibition on enforcement of arbitration provi- sions. These are backed up by very significant hammers including a potential misdemeanor for intentional

Federal regulations require all light- duty vehicle manufacturers and deal- ers to display standardized TREAD Act tire labels on a pillar of the door frame, or on the door itself. The label must specify the vehicle's: tire size cold inflation pressure capacity weight rating (gross vehicle weight minus curb weight)

Dealers can relabel in one of three ways:

1. Putting a new label on top of the existing label. 2. Modifying the existing label with the new tire or weight information. 3. If only the weight changes, placing a supplementary label adjacent to the original label. Replacement placards are available from OEMs, form companies, after- market parts and equipment suppliers, or through the National Truck and

Note: The labels only allow one tire option for front, rear and spare.

SAMPLE VEHICLE PLACARD

Equipment Association or the Specialty Equipment Market Association.

The Military Lending Act: How Does it Affect Your Dealership? 18

The Military Lending Act was passed by Congress a decade ago to protect service members and their depend- ents. The Department of Defense recently issued regulations that took effect October 3, 2016. Some lenders are questioning the extent to which the changes may affect motor vehicle loans. From the beginning, the Military Lending Act had exclusions for any credit transaction intended to finance the purchase of the motor vehicle when the credit is secured by the vehicle being purchased. It also excluded credit to finance the pur- chase of personal property when the credit is secured by the property being purchased. The revision does not affect those exclusions.

violations and invalidation of the credit. That is apparently what is causing lenders to be concerned. NADA has requested that the Department of Defense clarify that the exemptions (as they appear to do) cover not only the vehicle financed, but also negative equity, F&I, and other products. Be aware of these concerns if a finance source contacts you about the Military Lending Act. You may have to engage with the finance source, explain the MLA exemptions, and determine whether it has any special provisions for military lending.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016

10

“Cash Equivalents” Also Trigger IRS Form 8300 19

The customer retracts a cashier’s check originally for $10,001, and resubmits one in the amount of $10,000, causing the dealer to sus- pect the customer has restructured the deal to avoid the need for an 8300. Then, the dealer has a duty to file the form.

check for $10,000 or less will only trigger the reporting requirement if that cashier’s check is part of total cash/cash equivalent payments total- ing more than $10,000, or (again) if the consumer is actively trying not to trigger the report. A dealer takes payment of a cashier’s check for $10,000 and a wire transfer for the remaining balance. Here, the dealer does not have to file an 8300 form. The dealer receives a cash / cash equivalent payment for $10,001. In this case, they must file an 8300. Take the following scenarios:

The IRS requires dealers to report any cash payments greater than $10,000, using IRS Form 8300. Payments up to and including $10,000 in cash (or cash equivalents) do not trigger this requirement. The only exception to this is if the dealer suspects the buyer is attempting to arrange the deal in a certain way, specifically to avoid the reporting requirement. The IRS considers the following to be cash equivalents: cashier’s checks, bank drafts, traveler’s checks, money orders. Payments in those forms for $10,000 or more do require an 8300 to be filed. However, the IRS also makes clear that receiving a cashier’s

Filings for qualifying events are due 15 days after the transaction.

Reminder: All customers who were identified on an 8300 form during 2016 must be notified, in writing, of the form’s submission to the IRS no later than January 31, 2017. For more information, including details on filing 8300 forms electr nically, visit www.gnyada.com o

No Inspections Required for Out-of-State Sales 20

Drive Down Your Workers’ Comp Premiums Upfront Savings: GNYADA members get an upfront discount on their premium, an industry-specific safety plan, and job classifications done at the time of underwriting, ensuring the lowest rates possible at the inception of the policy.

Dealers occasionally call our Dealer Hotline asking whether they must inspect a vehicle that is being sold to an out-of-state resident. The answer is, “No.” Sales to out-of-state residents are specifically exempted from inspec- tion under state regulations. A vehicle sold to a nonresident, which is either receiving an “in-transit per- mit” from the dealership or is going to be exported, does not require an inspection in New York. However, it will usually have to be inspected in the state where it will be registered. Any vehicle that is going to be regis- tered in New York must be inspected, even if it will later be registered in another state.

CONTACT: Michael W. Conway at the GNYADA Insurance Brokerage to get a quote.

718.746.8100 mconway@gnyada.com

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016 11

EMPLOYMENT CORNER

Welcome New Members

21

GNYADA’s Employment Corner is a free recruiting and job placement service that lists qualified candidates for positions at dealerships.

We’re proud to welcome some of our newest dealer members to the GNYADA family:

dealership

help wanted

Bay Ridge Mazda www.bayridgemazda.com

If you have a position to fill, call 718.640.2012 .

Honda of Manhattan www.hondamanhattan.com

Hyundai of Long Island City www.longislandcityhyundai.com

FILE #

POSITION

RESIDES IN

Levittown Ford www.levittownford.com

OFFICE

Bookkeeper

Bronx

300

Milea Subaru www.mileasubaru.com

Receptionist

Massapequa

301

Northstar Mitsubishi www.northstarmitsubishi.com

SERVICE

Maintenance

Richmond Hill

302

Toyota of Manhattan www.toyotaofmanhattan.com

Parts Director

Old Bridge, NJ

303

Service Director

Wantagh

304

Volvo Cars of Queens www.volvocarsofqueens.com

Service Manager

Elmsford

305

Contact Us: Greater New York Automobile Dealers Association 18-10 Whitestone Expressway l Whitestone, NY, 11357 Dealer Hotline: 800.245.4640 l Headquarters: 718.746.5900 l email: assistance@gnyada.com DMV-DIRECT: 718.747.0400 GNYADA Insurance Brokerage, LLC: 718.746.8100 New York International Auto Show: 718.746.5300 Center for Automotive Education & Training: 718.640.2000

The information contained in this newsletter may not be relied upon for the avoidance of tax penalties. Readers are urged to discuss any issues raised in this newsletter with their legal and tax professionals.

Printed on FSC certified material. All original material except where noted. © GNYADA 2016

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • November 2016

12

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