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Lucky 13 for ‘13

Oh, what a difference a few years make.  In late 2008, many auto pundits lamented that we might never again see sixteen million annual new vehicle sales.  Proving that their memories are as faulty as their predictions, in 2012 they told us that, just like they always expected, sixteen million annual sales are on the […]

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A Doc Fee by Any Other Name…

Car people speak in their own shorthand that is not always precise. For example, a franchisor is the “factory”, even though the franchisor may simply be a distributor that does not manufacture anything. Or an extended service contract is often referred to as an “extended warranty”, even though it is not a warranty at all […]

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FTC Looking at Safeguards Compliance

by Michael Charapp On June 7, 2012, the FTC announced that it had agreed on terms of a consent order with a Georgia Toyota dealer stemming from the dealer’s failure to maintain adequate control of its customer information as required by the FTC Safeguards Rule.  The FTC charged that the dealer had violated its Safeguards […]

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New Mexico Issues New Spot Delivery Regulations

The Office of the New Mexico Attorney General recently adopted new spot-delivery regulations.  The regulations took effect June 1 and impose a wide-range of dealer requirements related to spot-delivery practices. The actual regulations can be downloaded using the following link. New Mexico Spot Delivery Regulations (12.2.13).

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Bundling? Really?

Bundling is suddenly a hot subject for F&I consultants. Bundling is the practice of packaging F&I and after sale products. This strategy may lead, overall, to more sales than á la carte offerings. But it may also generate more problems. It may be difficult for a consumer to determine the true costs and impact on […]

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Backdating is Often a Management Issue

There has been a substantial amount of publicity recently concerning backdating retail installment sale contracts. The practice can lead to serious problems. The problem can arise when a dealership spot delivers a vehicle to a customer who signs a retail installment sale contract that is not approved by a potential assignee on its terms. The […]

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FTC to Dealers: “Pay Us a Penalty No Matter How Much You Owe”

You’ve seen (and maybe even used) ads claiming that a dealer will pay off customers’ trades no matter how much they owe. The Federal Trade Commission has announced consent agreements with five auto dealers who ran variations of those ads.  The FTC charged that they deceived consumers into thinking they would no longer be responsible […]

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Proper Dating of Contracts: Avoiding Liability After Nelson v. Pearson Ford

In July of last year, a California appellate court handed down a very nasty, published decision that makes backdating retail installment sale contracts even riskier now than it was before.  I have been advising dealers not to backdate contracts for many years. However, what triggered a wave of suits in California and other states is a 2002 […]

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Who is Filling In the Customer’s Credit Application?

In a recent story, Automotive News reported on an informal online survey of F&I managers in which 29% responded that salespeople or sales managers fill in credit applications for customers at their stores. They’re just trying to help the customers fill them out the right way.  What could go wrong?  Plenty. What happens if a […]

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Lease Termination

Dealers generally assume that a customer who leases a vehicle will have the right to buy it at the end for the residual value.  That is not always the case. Pricing for a lease is generally based on three pieces: the residual which is the unamortized portion of the lease at which the lessor will […]

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