April 2022 By Michael G. Charapp Charapp & Weiss LLP Dealers today find themselves with increased responsibilities. Historically, they have taken care to protect their own businesses from lawsuits that can lead to crippling losses. Today, they find they must also protect THE business – selling new vehicles via the franchise model. Many in the
Best Practices Quiz
March 2022 By Michael G. Charapp Charapp & Weiss LLP In the last six months, we have reported on best practices you should adopt for your dealership operations. This quiz tests how carefully you have given attention to the suggestions. 1. You have received a letter from your franchisor that your sales performance is substandard
Mythbusters — OEMs setting prices
February 2022 By Michael G. Charapp Charapp & Weiss LLP Dealers are facing increased pressure from their OEMs to limit selling prices of certain vehicles – usually new model battery electric vehicles (BEVs) – to MSRP. Dealers, who for years have struggled to eke out a profit in competition with other dealers, feel they should
Mythbusters — Minor changes in dealer ownership
February 2022 By Michael G. Charapp Charapp & Weiss LLP Dealers understand that franchisors must approve the sale of a dealership, and that includes transfer of the right to control it. However, there are often changes in ownership that do not rise to that level – minor changes in ownership. Some dealers believe that since
Mythbusters — Sales of new vehicles for personal use outside the U.S.
February 2022 By Michael G. Charapp Charapp & Weiss LLP Every franchised dealer knows that sales of new vehicles for export are prohibited. Selling new vehicles to a broker who can sell them in a foreign market for a huge premium is forbidden. Do it, and the dealership faces chargebacks. Do it repeatedly, and the
Your information safeguarding obligations WILL get more expensive
December 2021 By Michael G. Charapp Charapp & Weiss LLP In spring 2019, we published an article titled “Your Safeguarding Obligations May Get More Expensive”. We reported that the FTC published for comment substantial and potentially expensive amendments to its Safeguards Rule originally promulgated under authority of the Gramm Leach Bliley Act (GLBA). The final
FTC Used Car Compliance
December 2021 By Michael G. Charapp Charapp & Weiss LLP The original Used Car Rule was promulgated by the Federal Trade Commission in 1985. While there are few dealership employees who were active before the Rule was put in place, there is still some confusion surrounding the completion of the buyer’s guide. This was caused
Make sure deals are neat and complete
By Michael G. Charapp Charapp & Weiss LLP You receive a letter from an attorney for a vehicle buyer. According to the attorney, the client was defrauded because your personnel did not disclose … (fill in the blank). “Nonsense,” say the F&I representative and the salesperson. “We use a form to disclose that.” How often
Be sure recall repairs are completed
By Michael G. Charapp Charapp & Weiss LLP Recall repairs are critical to manufacturers and to dealers. For manufacturers, federal law requires that recalls be completed. Manufacturers have been criticized for not putting sufficient emphasis on completion of repairs. They are under pressure to make sure vehicle owners respond to recall notices and repairs are
The Activist CFPB returns
By Michael G. Charapp Charapp & Weiss LLP During the Obama administration, the Consumer Financial Protection Bureau was an activist bureau. As to car dealers, the bureau was specifically structured to have no regulatory or enforcement power over them. Yet it spent substantial time and energy trying to use its jurisdiction over the finance sources