GNYADA March 2018 Newsletter

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

New York’s #1 Automotive Marketing Event

MARCH 2018 Volume 28, Issue 1

MARCH 30 - APRIL 8, 2018 MON-SAT 10AM-10PM SUN 10AM-7PM JAVITS CENTER AUTOSHOWNY.COM #NYIAS

SHOW HIGHLIGHTS:

1 The New York International Auto Show is a treat for car enthusiasts who want a first look at what’s new in the automotive industry. 2 From March 30 - April 8 more than 1,000 vehicles – many making their debut – will take over New York City’s Javits Center. Vehicles ranging from luxury sports cars to off-road pickups, as well as a few concept cars, will gleam on the show floor. 3 Activities include the Automotive Forum, Dealer Preview, Ride & Drives, Industry Symposiums, Virtual Reality presentations and more. Plus, there are always a few surprises. Visit autoshowNY.com for more!

1

The Newsletter • New York International Auto Show Special Edition I March 2018

Discounted Dealer VIP Tickets on Sale Now! As a dealer member of GNYADA, you are eligible for special discounts on Dealer VIP Tickets for the 2018 New York International Auto Show. Dealers can use these discounted VIP Auto Show Tickets to thank valuable employees, special customers, and reli- able vendors. In addition to Dealer VIP Tickets, show posters and dis- count coupons are available to you to help maximize the excitement of the Auto Show for your customers. To order VIP Tickets, contact Elba at 718.746.5300 or Elba@autoshowNY.com .

Dealer Preview Reception: There’s No Networking Event Like It Thursday, March 29, Javits Center Don’t miss one of the most exclusive events in the city, The Dealer Preview . Dealers are invited to the area’s number-one automotive networking event to join in

celebrating the 2018 New York Auto Show and the retail auto industry. The Reception will be held in the River Pavilion, on Level 4. Invitations for the event will be mailed shortly, and questions can be directed to the Association at 718.746.5900.

GNYADA thanks the sponsors of the Dealer Preview: • Title Sponsor: TD Bank • Arent Fox • New York Post • DropCar • Newsday • iHeart Media • Telemundo

COCKTAIL RECEPTION: 5PM-7PM SHOW FLOOR OPEN: 5PM-10PM

Formal invitation to follow via mail.

2

The Newsletter • New York International Auto Show Special Edition I March 2018

Auto Shows Drive New Vehicle Sales For 118 years, the New York International Auto Show has heralded the arrival of the latest new cars and trucks available for car buyers to purchase at area dealerships. Surveys of Show attendees confirm that people continue to have a passion for vehicles, and visit the Show because they want to research their next new car or truck. Combined with the increase in OEM’s advertising to consumers and the explosion of television, print, online and social media reports, the New York Auto Show is unique in that it is a global newsmaker and a regional sales event rolled into one.

Findings from 2017 NYIAS exit survey:

64 % of attendees intend to purchase a vehicle in the next 12 months after the Show. 57 % of attendees use the Show to compare vehicles and shop before going to a dealer. 40 % added brands to their consideration-list as a result.

Auto Shows Influence Buying Behavior

Auto Show Attendees Live Locally and are Ready to Buy

61 % of the attendees at the New York International Auto Show live in the GNYADA membership geographic area

87 % of attendees indicated that they plan to visit a dealership or dealer/ manufacturer website after the Show

39 % of attendees are millennials (age 18-34) 33 % of attendees are between ages 34-54

3

Charging ahead with Electrics: NYS Reveals All-New CHARGE-NY Exhibit at NYIAS

ested in these new products. New York State is helping them understand the new technology as part of their statewide sustainability efforts that include

GNYADA is working with New York State to inform and educate consumers about the ever-growing list of electric vehicles available to them at franchised new car retailers across our area with a display designed especially for the New York International Auto Show. The statewide CHARGE-NY initiative reflects the incredible advances in battery technology which have dramatically improved electric vehicle range as well as vehicle battery charging speeds. These technological improvements have made electric vehicles an increasingly viable option for many, and the automakers are reflecting this change with a range of new electric models arriving, or arriving soon, in dealerships. As a result of this, con- sumers are becoming increasingly inter-

tax incentives, infra- structure investment, and this exhibit at the New York Auto Show. GNYADA has prepared a brochure for visitors to the Show to use onsite and to also take home with them and use

when they visit their local dealers. Be sure to pick one up when you visit the exhibit on the North Concourse at the Show! N E L

EW C T R I CE

ORY C L E I E HV

&S

K

GNYADA Members’ Hospitality Suite GNYADA members are invited to join us at our Hospitality Lounge on Level 4 of the Jacob Javits Center for light refreshments and a place to relax while visiting. The Lounge will be open during the days and times listed.

HOSPITALITY HOURS:

Mon, March 26: Tues, March 27: Wed, March 28: Thur, March 29: Fri, March 30: Sat, March 31: Sun, April 1:

Mon, April 2: Tues, April 3: Wed, April 4: Thur, April 5: Fri, April 6: Sat, April 7: Sun, April 8:

8am-5pm 9am-5pm 7am-7pm 7am-11pm 8am-8pm 7am-8pm 8am-6pm

8am-8pm 7am-8pm 7am-8pm 8am-8pm 8am-8pm 8am-8pm 8am-6pm

The New York International Automobile Show is sponsored by: The Greater New York Automobile Dealers Association 718.746.5900 gnyada.com GNYADA Chairman: Lee Certilman GNYADA President: Mark Schienberg Show Committee Chair: John LaSorsa, LaSorsa Buick-Chevrolet, Inc. Vice Chair: Brian Miller, Manhattan Motorcars, Inc. Committee:

Oliver Brodlieb, East Hills Chrysler Jeep Dodge Gary Brown, Brown’s Jeep Chrysler Dodge Lee Certilman, Nardy Honda Louis G. Giordano, Croton Auto Park Maryann Kolb, Bill Kolb, Jr., Subaru Inc. Miles Miller, Porsche of Huntington

Larry Orlando, Tower Ford, Inc. Robert Penn, Penn Toyota, Ltd. Randi Siegel, Legend Auto Group Jack Weidinger, Weidinger Automotive Group Andrew Weinstock, Biener Audi, Inc.

AUTOSHOWNY.COM #NYIAS

4

The Newsletter • New York International Auto Show Special Edition I March 2018

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

MARCH 2018 Volume 28, Issue 1

1 High-Volume Models, Crossovers, and Electrics Make a Splash in the Big Apple Press Preview will Feature More than 60 World and NA Debuts

HIGHLIGHTS

DMV Rules Require Refund of Registration Overcharges page 3 GNYADA Builds Relationships with Local Legislators page 4 Sales Tax Deduction on Trade-Ins page 5

Keep Women in the Automotive Industry page 7

Top Auto Tech High School in New York page 9

NADA/J.D. Power/NYIAS Automotive Forum will remain on Tuesday, March 27. Manufacturers are planning more than 60 world and North American new vehicle announcements covering almost every seg- ment of the industry. Standouts include high-volume models from Toyota, Nissan, Kia and Subaru. Look for a wide range of new crossovers (the country’s fastest-grow- ing segment) from Cadillac, Lincoln, Acura, Volkswagen, Volvo and Maserati. And be sure to check out the newest electric vehi- cles from Jaguar Land Rover, Hyundai, and Rimac! “From our discussions with the automakers throughout the year, it is clear that the New York Auto Show is going to be one of our biggest yet, giving deal- (more on page 2)

With just weeks to go before New York’s largest ticketed consumer event opens its doors to the public, the 118th New York International Auto Show is gearing-up for an impressive line-up of press conferences, vehicle debuts, industry programs and spe- cial events to celebrate and promote the industry’s latest new cars and trucks. Each year, the Show adds to the excitement of new car unveilings with a range of indus- try events which attract automobile execu- tives and members of the media from every corner of the globe. The enormous success of last year’s bold shake-up of press pre- view week means that NYIAS will again kick-start the first press day, Wednesday, March 28th, with the World Car Awards program followed by back-to-back automaker press conferences. The Show’s

ZEV Sales Grow page 10 Top Ten Trends page 11

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

1

The Newsletter • March 2018

New York Auto Show (continued from cover) ers an unprecedented opportunity to tap into the incredible media and advertising blitz that the Show creates in greater New York during its 10-day run,” said GNYADA president, Mark Schienberg. auto industry is going forward, fast. Posters are being mailed to dealer- ships to use as part of their customer outreach. Please display the posters prominently in your showrooms and service areas.

view the Show before it opens to the public. After the Dealer Preview Reception, guests have unlimited VIP access to the show floor – without the crowds and lines – for a unique opportunity to see hundreds of the lat- est new vehicles, innovative concepts, and exciting displays from the world’s automakers. Auto Forum Draws Top Names: Don’t Miss Johan de Nysschen, Jim Farley and Bill Fay The New York Auto Show has once again joined forces with J.D. Power and NADA to go beyond the head- lines and explore how recent develop- ments will impact all aspects of the auto industry in the year ahead. This year’s Automotive Forum, at the Grand Hyatt Hotel in Manhattan on Tuesday, March 27, will offer keynote addresses, as well as panels to explore how the events of the past will influence the future. More speak- ers will be announced during the next few weeks, so stay tuned to learn which industry leaders will be sharing their insights. To register go to www.jdpower.com or contact Shawn Slater at shawn.slater@jdpa.com for more information. For more information about the Auto Show, visit autoshowny.com. REGISTER NOW: GNYADA Members receive a discount.

“We know that an incredible 64% of Show attendees said they were in the market to buy or lease a vehicle with- in the year. So we know that they continue to value the Show as a cen- tral piece of car buying research. There is no better way to excite con- sumers about cars than an Auto Show,” he continued.

Dealership Customer Loyalty Promotion: Auto Show Tickets Enclosed with this Newsletter, dealers will find a form to purchase discount- ed Auto Show tickets to give to their special customers. These tickets are good during the public show dates only (March 30 – April 8) and are an excellent way to thank loyal cus- tomers and vendors. Dealer Preview: Networking and New Cars Developed to help dealer principals, and their special guests network, research new products, and get early access to vehicles that their customers will soon be requesting, this year’s Dealer Preview Reception will take place at the New York International Auto Show on Thursday, March 29. This invitation-only event is now one of the can’t miss events on the calen- dar. Invitations will be mailed to deal- erships shortly. Join us for an evening of networking, food and entertain- ment! Dealer preview attracts hun- dreds of dealer principals, general managers, and legislators from all over the tri-state area who come to

FOR SECURITY PURPOSES, NO BACKPACKS ALLOWED. RANDOM SECURITY AND BAG CHECKS. AN ACTIVITY OF THE GREATER NEW YORK AUTOMOBILE DEALERS ASSOCIA TION.

12:59PM

Fast Forward to this year’s Poster Art: Excite Your Customers You see it on billboards, subway trains, the LIRR, Metro North, online, and in print, the 2018 New York Auto Show poster is here! This year’s art- work lights up the city! Inspired by the rapid acceleration of automobile technology, this year’s artwork spot- lights a sleek Koenigsegg Regera powering the Auto Show name while, in the background, the NYC skyline surges with energy and excitement. This concept tells the story that the

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

The Newsletter • March 2018

2

2 In Memoriam: Marvin Suskin

If your dealership obtains registr- ations and titles for buyers, you can either calculate actual charges or estimate the total amount due. According to New York State law, if a registration overcharge is based on an estimate, the dealer must refund any overcharge within 60 days of securing the registration and title. In addition, if your dealership estimates this fee, you must include the following wording in the sales contract, lease or a separate document initialed by the customer: We are deeply saddened by the passing of Marvin Suskin. Marvin, 90, passed peacefully on Sunday, March 11, 2018, with his beloved family by his side. For more than 70 years, Marvin brought great vision, vitality, and leadership to the retail automotive industry. Born and raised in Brooklyn, NY, Marvin grew up in the automobile business. After graduating from Erasmus Hall High School and serving a stint with the Merchant Marines in World War II, he joined the service department of his father Jack's dealership, Long Island Motors of Woodside, Queens, in March 1946. Over the next eight years at the DeSoto-Plymouth franchise, Marvin also worked in the parts department and as service manager before becoming sales manager for fleets. In 1954, Jack sold the dealership but a year later father and son became part- ners in Dale Motors of Freeport, NY,

“The amount indicated on this sales contract or lease agreement for registration and title fees is an estimate. In some instances, it may exceed the actual fee due the Commissioner of Motor Vehicles. The dealer will automatically, and within sixty days of securing such registration and title, refund any amount overpaid for such fees.” GNYADA suggests checking your contracts and lease agreements for this disclosure statement. GNYADA further urges dealers to have a proc- again selling DeSotos and Plymouths. In 1960, the dealership changed to Chrysler – Plymouth, and the business arrangement continued for a decade until Jack retired. In 1975, Marvin established Scarsdale Ford. He took on Robert Knapp as a partner in 2000 and they continued Scarsdale Ford’s commitment to Throughout his career, Marvin won a host of Ford Motor Co. excellence awards in customer service and sales. He was a recipient of the 1986 Time Magazine Quality Dealer of the Year Award , the UJA Man of the Year in the Automobile Industry , the 1995 recipient of the Boy Scouts of America’s Good Scout Award and twice appointed to chair the Greater New York Automobile Dealers Association (1985-86 and 2003-04). A GNYADA member since 1970 and board member for more than 30 years, Marvin was responsible for making providing quality service and excellent customer service.

dramatic improvements to the industry. He was instrumental in creating and developing many GNYADA programs and committees, including the Government Relations Committee which he chaired for more than 10 years. Marvin also contributed to a wide range of initiatives and services, including lobbying on behalf of franchised new car dealers, supporting a strong political action committee, increasing consumer awareness, advocating to government and community groups, and promoting special events such as the New York International Automobile Show. Marvin is survived by Jayne, his loving wife of 39 years, his daughters Robin (George) and Melanie (Al), and his grandson Erik.

edure in place to ensure overpay- ments are refunded within 60 days. 3 DMV Requires Refund of Registration Overcharges

Registrations Transfer plates Renewals Title processing VIN searches Low rates CALL 718.747.0400

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

The Newsletter • March 2018 3

GNYADA Testifies Against NYC Financial Disclosure Rules

4

Council to strenuously oppose these burdensome requirements. The meetings resulted in several positive changes to the proposed two-day cooling off period, reducing it from permitting cancellation after delivery to an optional two-day contract review that is not available with a spot delivery. The City was unwavering on the financial disclosure requirements. Schienberg’s testimony called the laws flawed and impractical. He pointed out that they would negatively affect NYC dealers’ businesses and increase the cost of used cars for NYC consumers. The Association also submitted detailed J. Flanagan and his Chief Counsel in his Smithtown district office. New York City Public Advocate Letitia James and State Assemblyman Ed Braunstein were at the Center for Automotive Education and Training (CAET) to load coats for the New York Cares Coat Drive and interact with students competing in the Regional Automotive Technology Competition. Congressman Tom Suozzi spent a morning at North Bay Cadillac, as part of his Tom and the Trades tour, in which he visits job sites in his district to highlight good- paying, high-skill jobs. Assemblywoman Stacey Pheffer- Amato visited the CAET to discuss the recall bill GNYADA advanced last year, which she sponsored. n n n

On February 28, the New York City Department of Consumer Affairs (DCA) held a public hearing on its proposed rules to implement the new financial disclosure law and the two- day contract cancellation requirement. GNYADA President Mark Schienberg testified in opposition to the new rules. In his testimony, Mr. Schienberg said that the laws are unwarranted, unworkable for dealers, and harmful to consumers and the local economy. The hearing was the latest step in a year-long battle that began when the City proposed laws to regulate used car sales even further. GNYADA held numerous meetings with DCA and the City

written testimony that expanded on Schienberg’s oral testimony. GNYADA expects that DCA and the City Council will contact the Association for clarification on how to make these laws workable. The Association will continue to push to make compliance with these rules less onerous for dealers. Supporting the GNYADA New York City PAC allows the Association to ensure visibility for franchised new car dealers. To learn more about the PAC, call 718.746.5900 or email Kelsey@gnyada.com.

GNYADA Builds Relationships with Local Legislators 5

This legislative session, GNYADA is focusing on strengthening the protections created by the broker bill it passed last session, stopping Tesla’s expansion, getting the doc fee increased, and achieving a statewide resolution on the issue of recalls. These relationship-building meetings allow GNYADA to show legislators that dealers are valuable to and invested in their communities and to explain why these issues are important. While we wait for a statewide recall solution that will provide safe harbor, ensuring that all customers are aware of potential recalls is best practice. GNYADA created Recall Check Window Decals that provide such disclosure. To order decals, please call the Association at 718.746.5900.

GNYADA and dealers have been meeting with local, state, and federal legislators. Some recent visits include:

GNYADA President Mark Schienberg, Chairman Lee

n

Certilman, Government Relations Chair Brian Miller, and member constituents met with New York State Senate Majority Leader John

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

The Newsletter • March 2018

4

NADA Director’s Column ADA Membership Strengthens the Dealer’s Voice in D.C. Attend the NADA Show 2018 by Bob Vail, Vail Buick GMC, NADA Director Metro New York

NADA’s impact on our government in Washington is precisely as strong as the volume of dealers we represent. I urge all NADA members to keep their membership current so we can maintain this crucial strength in numbers. If your dealership isn’t part of NADA, you can give our lobbying efforts a big boost by joining today. NADA Works for Dealers NADA’s Political Action Committee forges relationships with federal representatives and candidates who are receptive to our issues. This Committee enables dealers coast-to- coast to speak in one clear, unified voice, and ensures politicians are

aware of the vital economic role that dealers play in this country. Tax Reform In 2017, NADA was instrumental in amending the tax reform bill to preserve 100% deductibility of interest on floor plan loans. We also guarded against federal actions that could weaken the dealer franchise model and contested regulations that would impede dealership business.

livestock) can be eligible for the trade-in credit as long as the dealer accepts the property for the purpose of resale and applies the credit to the purchase of the new or used vehicle the dealer is selling or leasing to the buyer. GNYADA publications, A Guide to Sales Tax for Automobile Dealers (Pub. 838) and A Dealer's Guide to Sales and Use Taxes on Long-Term Motor Vehicle Leases in New York State (Pub. 839), are a great resource for dealerships. Contact GNYADA today if you need a copy! NADA Convention I hope to see you at the 2018 NADA Show, taking place in Las Vegas from March 22 to 25. This event is an invaluable opportunity for dealers to network with exhibitors, OEMs, and other industry minds. NADA is planning events and seminars that will dig into the latest automotive trends, as well as some very informative workshop sessions and exciting guest speakers. Go to show.nada.org to register.

Sales Tax Deduction on Trade-Ins 6 Calculating the correct sales tax on a deal involving a trade-in is important because this is often an area subject to audit. Calculating a sales tax Lease Transaction Regardless of the value of the trade- in, the sales tax credit will be based on the amount of the equity the customer has in the trade-in vehicle.

“credit” can be confusing. Below is a summary of the difference between a retail purchase and lease transaction with a trade-in. Retail Purchase The fair market value of the trade-in is the amount applied to reduce the selling price, which reduces the amount used to calculate sales tax due.

Ownership Remember, the buyer or the lessee of the vehicle does not have to own the vehicle or other property being traded-in in order to receive the sales tax credit. Eligible Property In addition, any property, not just a vehicle, being traded in (a boat, motorcycle, diamond ring, painting,

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

The Newsletter • March 2018 5

When Staff Qualify for Both PFL and FMLA

7

With New York State’s Paid Family Leave (PFL) law now fuly in effect, it is important for dealers to know how PFL interacts with the federal Family Medical Leave Act (FMLA) and any accrued sick time, vacation time, or other paid time off (PTO). An employee’s leave will often qualify under both PFL and FMLA, meaning dealers should ensure that both types of leave are running at the same time. While the qualifying reasons for leave under PFL are similar to those under FMLA, they do not totally overlap. Below are the types of leave that qualify for both: To care for a child during the first twelve months after birth, adoption, or fostering; To care for a parent, minor child, or spouse with a serious health condition; To relieve family pressures during a parent, child, or spouse’s military service. n n n

When PTO use may be required Dealers can allow but cannot require employees to use accrued sick, vacation, or other PTO to receive full pay while only PFL is running. Dealers can require employees to use accrued PTO while an employee is on FMLA leave or when PFL and FMLA are running at the same time. To have PFL and FMLA run concurrently and to require employees to use all accrued PTO during FMLA leave, a policy explaining this must be written and distributed to employees. Employees are entitled to 12 total weeks of leave combined FMLA and PFL in a 52-week period. If a worker takes the full eight weeks of PFL available in 2018, they cannot also, in that same 52-week period, take more than four weeks of FMLA. This article has been provided by GNYADA's Employee Relations Plan (ERP). ERP has a sample policy for ERP members. Call 718.746.5900 or email Julie@gnyada.com to find out more!

Make Sure You’re Getting Proper Reimbursement for Warranty Work 8

make dealers in the vicinity. The vast majority of submissions are accepted as presented; most rejections are due to errors that can be corrected and resubmitted. While most OEM’s comply with New York’s provisions, some attempt to make the process more difficult. When working with these OEM’s, a dealer can “manually” submit their labor rate increase through the statutory procedure. When that is done, the dealer can then also submit their parts mark-up increase request without any concern that it will be rejected. Retail reimbursement requests can be done every twelve months and, once approved, remain in effect until the

Since 2009, New York dealers have been able to be reimbursed for warranty parts and labor at the dealership’s retail rate. Surprisingly, there are many dealers who have yet to take advantage of this right, despite the fact that the difference between the OEM’s standard reimbursement and the dealership’s retail rates can be significant. Section 465 of the Franchised Motor Vehicle Dealer Act details how dealers can request an increase in its reimbursement rate; the OEM must respond within 30 days. An OEM can rebut only if (i) the dealer failed to follow Section 465’s calculation procedures; or (ii) the submitted rate or mark-up is unreasonable compared to the practices of all other same line-

dealership seeks a change. To learn more about your dealership’s right to an increase in warranty parts reimbursement, contact GNYADA to discuss your options. GNYADA thanks Richard Sox, a shareholder in the Bass Sox Mercer law firm for this article. This communication is for educational purposes only and should not be construed or relied upon as legal advice. Attend GNYADA's Franchise Law Seminar on May 10 to learn more! Richard Sox, Russ McRory of Arent Fox, and Doug Clark of Shenker Russo & Clark will all be speaking.

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

The Newsletter • March 2018

6

Keep Women in the Auto Industry 9 Despite the great career opportunities for women in the automotive indus-

Unconscious Bias: Do you ask or expect women to perform tasks below their level, such as taking notes or getting coffee, but not expect men to do the same? Do you give equal time and consideration to men and women in meetings? Check out NADA’s #womeninauto- motive Video Competition , where women currently in the industry are sharing stories about their careers. NADA’s favorite 10 submissions will win an Apple Watch!

Feedback: Does your dealership hold women to a different standard of appearance or attitude? Before criticizing the way a woman acts or dresses, consider if you would criti- cize a man in the same way, for the same thing. Inclusion: Where do your business and social events take place? Are locations universally welcoming to both men and women? For example, even if women are not explicitly excluded, they are unlikely to feel welcome at a work lunch at Hooters.

try, they are currently only about 19% of dealership employees. To ensure your dealership isn't losing skilled women employees, consider how your dealership’s practices in these key areas may be subtly affect- ing women working there: Career Advancement: Are you or any of your managers basing employment decisions upon the assumption that women have family commitments that men are assumed not to have?

New Military Lending Act Interpretation 10

The DoD clarified that motor vehicle finance contracts that also finance costs expressly related to the product, such as a service contract, or negative trade equity, remain exempt.

As previously reported, the Department of Defense (DoD) issued an interpretation of its Military Lending Act (MLA) regulation that triggers duties and restrictions when creditors include Guaranteed Automobile Protection (“GAP”) coverage or other credit-related products in a motor vehicle financing contract with covered borrowers.

New York also has a law prohibiting discrimination against service members in the context of credit decisions so don’t reject a service member’s credit application to avoid dealing with the MLA.

Frequently asked questions about the effect this interpretation may have on New York dealers:

What is MLA and who does it apply to?

The MLA is a 2006 law which restricts the terms of certain consumer loans made to certain military personnel, their spouses, and dependents. These individuals are “covered borrowers”.

What should dealers do now?

Talk to your financing institutions to find out their MLA policies. It is likely that they will report not offering anything that triggers the MLA. Since New York requires GAP be offered in certain circumstances, it is likely the financing company will just tell consumers they are not responsible for the GAP if there is a loss to avoid triggering the statute. The contents of this article are not legal advice but given for informational purposes only. Talk to your dealership attorney about next steps. n n

How do I know if someone is a covered borrower?

As part of the sale, your dealership must check the status of prospective borrowers here .

What if someone is a covered borrower?

Motor vehicle finance contracts that also finance products related to credit, such as GAP or credit insurance, are regulated by the MLA. If a credit-related product is included in a vehicle financing contract with an active- duty service member or family member, the dealer likely cannot take a security interest in the financed vehicle.

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

The Newsletter • March 2018 7

11 Harassment Reporting Policies Protect Dealers and Employees

Key Components of a Reporting Policy Dealers cannot intervene or take disciplinary action when harassment or discrimination occurs unless they are aware of the incidents that take place. Therefore, a policy for reporting harassment and discrimination should: Be explained in detail in the employee handbook. Designate managers and supervisors to whom employ- ees may bring complaints. It is important to have mul- tiple avenues for reporting harassment, particularly if someone in the reporting chain is alleged to be the harasser. Give employees the option to complain either orally or in writing. If a complaint is made orally, the person receiving it should create a written record for the pur- pose of tracking the progression of events. The above actions are important indications that your dealership takes all complaints of harassment serious- ly, as dealers are legally required to do. n n n n While sexual harassment has been making headlines, other forms of harassment can be just as harmful and costly to businesses. It’s critical for dealers to have a system in place that allows incidents of harassment and discrimination to be easily reported. Drafting, communi- cating, and enforcing such a policy can protect a dealer- ship from costly penalties for individual bad actors.

In a recent hostile workplace case, an African- American employee was subjected to highly offensive behavior from coworkers, including the use of racial slurs and references to hate groups. The employee complained and the employer, in accordance with the anti-harass- ment policy, investigated. The coworkers were either disciplined or fired. The employee then sued the employer for fostering a racially hostile work environment; since the employee did not report the harassment right away, which the policy required, the court found in favor of the employer. The court also noted that the employer acted promptly once the incidents were reported.

Jim McGrath of Putney, Twombly, Hall & Hirson and Alexander Leonard, of Fox Rothschild LLP will be dis- cussing this and related topics at the Spring Labor Law Seminar on May 17, 2018. To register, call 718.746.5900 or email Kelsey@gnyada.com.

Make Sure Your Dealership Has a MVAC-Trained Technician 12

An Environmental Protection Agency update that took effect January 1, 2018, says that selling motor vehicle air conditioners (MVACs) to an uncertified technician, or handling them as an uncertified technician, could be a violation of the Clean Air Act. Wholesale sellers are now requiring that MVAC purchasers show that at least one shop technician has been certified. Dealer resources include a list of EPA-approved certification programs ; general information on EPA's MVAC refrigerant management requirements ; and NADA's tried-and-true Dealer Guide to the EPA Mobile Air Conditioning Coolant Recycling Regulation (L30-M).

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

The Newsletter • March 2018

8

The Best of the Best Compete for the Title “Top Auto Tech High School in New York” 13

Since 1991, the most highly-skilled high school automo- tive students in the metro area have gathered each year at GNYADA’s Center for Automotive Education to compete in the New York Automotive Technology Competition and vie for a spot in the National Automotive Technology Competition. The Auto Tech Competition is a trademark of New York’s automotive industry; it tests students’ skills and knowledge by requiring them to diagnose and repair various automotive issues, while a timer is ticking down. “The New York Auto Tech Competition is about recog- nizing the accomplishments of the next generation of technicians,” explains Eddie Gazzillo, Executive Vice President of GNYADA and the Competition’s Executive Director. “By rewarding the hard work and dedication these students have put into becoming the best techni-

cians they can be, GNYADA is investing in both their individual career goals and the future success of the industry.” More than 40 teams entered the competition. In the end, students Joe Musial and Tyler Witkowski from Orange- Ulster BOCES came in first place. The duo will go on to represent GNYADA at the National Competition where they will match their automotive knowledge against teams from across the nation, Canada, and China. The National Automotive Technology Competition will take place during the New York International Auto Show at the Jacob Javits Center on April 3rd and 4th. For more information on the National Automotive Technology Competition visit www.nationalautotechcompetition.com .

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

The Newsletter • March 2018 9

14 Increased Immigration Enforcement Could Cost Your Dealership

Section 1 must be completed by the end of the employee’s first day of paid work and section 2 within three business days fol- lowing the first day of work. Employees must provide a form or forms that establish identity and employment authorization. If an employee provides a U.S. Passport or U.S. Passport Card, it establish- es both or they can provide a photo ID and birth certificate or social security card. A complete list of documents is available here . Keep Forms I-9 in a separate file, not the employee’s personnel file, and stored in a secure space that only authorized personnel can access. Conduct regular “self-audits” to identify any problems in your n

process; carefully choose employees for the self-audit, to ensure you don’t target a specific group of workers. If there are mistakes on any I-9, contact your dealership attorney for guidance on how to correct the form. If ICE does show up at your dealer- ship with a Notice of Inspection, contact your attorney! You have three business days to produce Forms I-9 for all current employees. Retain Forms I-9 for former employees for the longer of at least three years from date of hire or one year after the end of employment.

Federal Immigration and Customs Enforcement (ICE) officials have increased enforcement, targeting retail businesses across the country, arresting individuals and requiring businesses to produce I-9 forms for all employees, to prove work authori- zation. ICE said that such enforce- ment is going to be the new normal. Fines as High as $16,000 Knowingly hiring and employing undocumented workers can lead to fines from $375 to $16,000 per viola- tion. Even technical violations, like failing to produce an I-9, can cost from $110 to $1,100 per violation. To avoid significant fines, dealers must: Complete an I-9 for each person hired. Ensure you are using the latest version of the form, which is marked 07/17/17 N. n n Thanks to New York State’s Drive Clean Rebate, dealers have seen an increase in the sale of zero emission vehicles (ZEV). Since the program launched in March 2017, franchised dealers in New York State have delivered over 5,500 rebate-eligible ZEVs to customers. Over 77% of Zev sales have taken place in the metro area. So far, roughly $7.5 million, of the total $55 million allocated for this program, has been paid out in ZEV rebates. Statewide, franchised new car dealerships have accounted for nearly 97% of electric vehicle rebate applications! There are a wide variety of rebate-eligible vehicles, virtually every manufacturer has one! Find a list of zero emission vehicles eligible for a rebate here . ZEV Sales Grow 15 n n n

n

n

New York State ZEV Sales by Manufacturer

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

The Newsletter • March 2018

10

Top Ten Trends 16

Here are the 10 trends that Cox Automotive believes will have the greatest impact on automotive businesses in the near-term and long- term. Cox will continue to monitor these trends closely as they shape the future of the automotive industry. 1 Millennials: As Millennials age into the largest car-buying cohort – which they will be by 2020 – dealers need to understand the shopping and buying preferences of this generation to more effectively market and sell to them. 2 Affordability: While consumer expenses are finally seeing some relief, it does not necessarily mean more money for a car – especially as interest rates are expected to continue to rise. 3 Autonomous Vehicles: While we are definitely headed into a future that is different from today, it's one that offers more opportunity than threat. That being said, dealers need to be preparing now for a world where possibly fewer consumers buy and own vehicles but one where fleets take on a more dominant role in the auto ecosystem. 4 Used Car Prices: Strong retail demand for used cars is largely being driven by affordability. Dealers need to be aware of a consumer trend towards lower price points and used

cars and should consider using stocking tools to align their inventory mix accordingly. 5 Digital Retailing: According to the 2017 Cox Automotive Digital Retailing Study, nearly all consumers (98%) want the ability to do at least some piece of the car shopping/buying process online. Dealers need to deliver the kind of online experience that consumers have grown to expect from other industries. Digital Retailing meets consumer expectations while allowing dealers to maintain control of the deal. 6 Shifting Consumer Preferences: Consumer preferences are shifting and most of the growth has been in the truck, SUV, and crossover segments. The luxury segment is following in a similar pattern. Thanks to today's modern fuel efficiency standards, consumers are now able to get the conveniences of an SUV/CUV without necessarily seeing the trade-off of higher gas expenses. 7 Fixed Ops: Cox Automotive calculations indicate there is a $99 billion opportunity with fixed ops, and dealers are currently capturing only 30% of that market. Consumers say convenience, value, and trust affect where they choose to get their vehicle serviced. Dealerships can

compete by implementing conveniences like online scheduling and by offering and promoting competitive pricing and price-match guarantees while focusing on advertising messages about high- quality service (e.g., OEM parts and certified technicians). 8 Consumer Credit: The market would not have seen the growth of 2015 and 2016 without credit and its availability. We are currently at a very low default rate and we will likely see this healthy default-rate level continue. The trend of longer loan terms has been growing and there is a likelihood to continue to see longer terms on loans (e.g., longer than 60 months). 9 Dealership Staffing: As dealers face increasing margin compression and operating costs, profitability is being tied up in comprehensive operational inefficiencies. Employee recruitment, retention, and development (staffing), are the biggest sources of operational opportunities that dealers have today, but two out of three dealers have no staffing strategy in place. The Economy: Fundamentally, how the economy is performing directly correlates to sales, and next year’s growth is likely to be similar to this year’s if not slightly better! 10

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

The Newsletter • March 2018 11

Begin 2018 by Making Full Use of Your GNYADA Benefits For over a century, GNYADA has committed to ensuring the success and prof- itability of its members with services that refine and enhance dealers' operations. We encourage you to utilize each of our benefits and programs here in the New Year to make 2018 a standout year for your business. Below are some of the crucial services GNYADA provides to its members: 18

Welcome New Members GNYADA welcomes the following dealers and Allied Members: NEW DEALERS: Audi Queens Great Neck Ford (Tower Ford) Hillside Toyota Mercedes-Benz of Orange County Mount Kisco Chevrolet Cadillac North East Ford Prestige Lexus of Middletown Route 9 Mazda South Shore Chrysler Dodge Jeep RAM South Shore Kia n n n n n n n n n n n n 17 Huntington Ford Lincoln Mazda of Valley Stream

The GNYADA Insurance Brokerage covers all of your deal- ership’s insurance needs, including health and dental coverage, workers’ comp, disability, life insurance, medicare and flexible spending accounts. The Brokerage also consults dealers on mandated changes to their insurance offerings and helps them stay compliant with IRS form filing. Learn more at gnyada.com/dealers/insurance/overview . DMV-DIRECT processes titles and registrations for dealers and can handle rush duplicate titles in as little as three days. In addition to helping dealers with plate transfers, renewals, and VIN searches, DMV-DIRECT is also the only partner outside of Connecticut that can issue Connecticut plates. Visit gnyada.com/dealers/registration/overview . The Association’s Bond Program secures required bonds for dealers throughout our region. In addition to offering members the lowest rates on new car dealer surety bonds ($300 for a two-year, $50,000 bond), the Association helps dealers with Permit Bonds, Utility Bonds, and many others. To learn more, email jennifer@gnyada.com . Each year, GNYADA holds more than 60 specialized Workshops & Seminars for dealers. Trainings are conducted by expert instructors and are designed to improve dealership operations and enhance profitability. To review upcoming courses at GNYADA’s Center for Automotive Education & Training, visit gnyada.com/dealers/professional/overview.

Staten Island Buick GMC Volvo Cars of Manhattan Volvo Cars White Plains Westchester Subaru

n

n

n

PROGRAM OND A AD GNY B

n

ALLIED MEMBERS: ACV Auctions CCS Motors, Inc n n

Clear Channel Outdoor Dealer Solutions North America, Inc. The Dent Specialist East Coast Power & Gas Gold Coast Maserati Heartland Payment Systems KinCrete Flooring, LLC Law Offices of Stuart Rosenthal

n

n

n

n

n

n

n

n

Greater New York Automobile Dealers Association 18-10 Whitestone Expressway l Whitestone, NY 11357

Dealer Hotline: 800.245.4640 Headquarters: 718.746.5900 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

Printed on FSC certified material. All original material except where noted. © GNYADA 2018

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.

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

The Newsletter • March 2018

12