GNYADA October 2014 Newsletter

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Sales Up 11%

9 Don’t Rely on Lenders for Adverse Action Notices

in August 10

MARKET TO REMAIN STRONG

3 When you don’t get the customer financed either because no lender gives you terms that are acceptable to your dealership or because the customer, after negotiations, rejects your “final offer” of credit. Not offering the customer credit on the terms they request is also an adverse action. If the customer rejects your final offer, you haven’t given the customer credit on the terms they want. Non-compliance Can Be Costly Damages (including civil liability and punitive damages) and fines for not giving adverse action notices can be significant. Add to that attorney’s fees and costs to a prevailing con- sumer. Don’t forget that the AG, FTC, or CFPB (as applicable) may also seek additional fines and penalties. GNYADA thanks Randy Henrick, Associate General Counsel and lead Compliance Counsel for Dealertrack, Inc. for his contributions to this article.

Dealers frequently ask about Adverse Action Notices (AAN). Do I have to send them? (Yes.) Can I rely on the lender’s adverse action notice? (No.) To which customers do I have to send notices? (Read on—that’s not a yes or no question!) Under federal law, dealers must give AANs to a consumer if he or she is turned down for credit or offered credit on terms less favorable than what he or she had sought. A dealer must provide the AAN in writing, within 30 days of receiving a credit application. 1 When you take a customer’s credit application but do not send it to any lender, typically because the cus- tomer is credit challenged and you know you won’t get them financed. 2 When you unwind or re-contract a “spot delivery” deal. You are virtual- ly certain to get less favorable terms for the consumer in the new deal. Who Must Receive an AAN? Send an AAN:

Metro area sales rebounded 11% in August compared with 2013 after a slow July. That’s a predicted annual total of more than 500,000 units, an increase of around 4% over last year, according to figures highlighted in the September issue of New York Auto Outlook , published by GNYADA. 1 Area new vehicle market increased an estimated 11% in August of 2014 versus a year earlier. U.S. market was up 5.6%. 2 Area market increased 3.9% during the first eight months of this year versus a year earlier, compared to 6.1% nationally. 4 Light truck market share rose to 51.8% thru August of this year, up 4.6 points . 5 Honda, Toyota, Nissan, Jeep , and Ford were the new vehicle market share leaders during the first eight months of 2014. 6 Area used vehicle market fell 3.5% for the first seven months of this year. September Auto Outlook Highlights: 3 The market is predicted to improve 4% from 2013 to 2014.

Information Safeguards and Identity Theft Protection OCTOBER 23, 2014 10:00am -1:00pm Center for Automotive Education & Training Presented by: Avoid hefty penalties for data security breaches and sales to identity thieves. A data security breach may be your dealership’s biggest prospective liability. Learn the federal and state laws and regulations relating to a dealer’s obligations to safeguard and securely dispose of customer information and to verify a customer’s identity. To register email carole@gnyada.com Randy Henrick, Associate General Counsel & Lead Compliance Counsel for Dealertrack, Inc.