Industry news and updates for Michigan's franchised dealers.

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MADA Fast Facts

March 22, 2024

Vol. 26 | Issue 12

Reminder: assume lien first -- then pay off lienholder

The Michigan Department of State (MDOS) and MADA would like to remind dealers of the proper procedure when processing a trade-in or purchase that has a lien and an electronic title.

To ensure that the vehicle is in the dealer's name before a new title is issued, please follow these steps:

1) Look up the VIN on e-Services to determine if there is an electronic title

2) If the title is electronic

• first assume the lien in e-Services
• then request either paper or electronic title

3) Pay off the lienholder

This ensures the title will be in the dealership's name prior to the loan being paid off, which signals that the title should be provided to the dealership. We don't want a free and clear title being mailed to the former owner!

To validate the title is in the dealer's name, use the title lookup feature in your dealer account. It will show the owner, title type (paper or electronic), mileage and issuance date. Keep this copy in your deal jacket as proof.

Not sure if you should request the new title in paper or electronic version? The following are common reasons a dealer will request a paper title: Auction - Out of state - Wholesale.

If you have additional questions about electronic titles or liens please contact Debbie Korn at (800) 292-1923 or email dkorn@michiganada.org.

Aaron Lee, senior director at Ally Dealership Insurance, recently recorded a theft and fraud podcast, which is posted to Automotive News. The podcast offers excellent reminders to help safeguard your vehicle inventory and spot potentially fraudulent auto loan applications. The full podcast is available here (audio and script provided), but we have also highlighted a few points below:

Key control. So, dealers should look into and consider using key machines for all their vehicle keys, the inventory, as well as their customer vehicles. The thieves aren't always just looking for the dealership inventory. The vehicles that the dealerships have on their property that may be in for service from customers are also susceptible to theft as well. So, if they look to use a key machine that is hidden in a locked room without windows and then making sure that they're monitoring activity into and out of that machine so they can keep an inventory of where the keys are at any given time.

Physical access to the vehicles. So, if they look at the dealer lot and think about if someone were to get on the property and steal a vehicle, can they get that vehicle off of the lot? And if they can, what are some ways that we might be able to prevent that vehicle from leaving the property? So that's things like fencing, poles or boulders around the property, ram-proof gates are all things that dealers can consider in increasing the physical security of their location.

High value vehicles. These may be prime targets for theft, dealers can do things as simple as removing the battery or a fuel sensor or fuses, things to just make it harder for the vehicle to start so that it's less convenient for a thief to be able to access and steal that vehicle quickly.

Click here to listen to the full podcast, which provides additional reminders to help employees detect fraudulent documentation.

In 2023, General Motors gifted Northwood University $100,000 to host an automotive camp. Following the camp’s success last year, GM has contributed another $100,000 for this year’s Full Tank Automotive Camp, which is aimed at students entering high school or currently in high school for the following school year.

Registration is now open for this five-day camp experience, which offers students an opportunity to explore the automotive industry. “Students will learn about careers throughout the automotive industry, including design, development, manufacturing, sales, marketing, service and aftermarket,” explained Elgie Bright, who chairs the Automotive Marketing/Management program at Northwood University.

The residential camp offers hands-on exploration that can help jumpstart a future business leader’s career in automotive. Full Tank Auto Camp will be held from Sunday, June 23 to Friday, June 28 in Midland at Northwood University. 

To counter promoters that marketed misleading information about the Employee Retention Credit (ERC), the Internal Revenue Service urged businesses to review seven suspicious signs of a bad claim and see if the agency’s special programs can help them avoid future compliance issues.

This is a very condensed version of this week's reminder email from the IRS. Please see IR-2024-75 for more complete information.

1) Too many quarters being claimed. Some promoters urged employers to claim the ERC for all quarters that the credit was available. Qualifying for all quarters is uncommon. 

2) Government orders that don’t qualify. Some promoters told employers they can claim the ERC if any government order was in place in their area, even if their operations weren’t affected or if they chose to suspend their business operations voluntarily. This is false. 

3) Too many employees and wrong calculations. Employers should be cautious about claiming the ERC for all wages paid to every employee on their payroll. 

4) Business citing supply chain issues. Qualifying for ERC based on a supply chain disruption is very uncommon. A supply chain disruption by itself doesn’t qualify an employer for ERC. 

5) Business claiming ERC for too much of a tax period. It's possible, but uncommon, for an employer to qualify for ERC for the entire calendar quarter if their business operations were fully or partially suspended due to a government order during a portion of a calendar quarter. 

6) Business didn’t pay wages or didn’t exist during eligibility period. Employers can only claim ERC for tax periods when they paid wages to employees. 

7) Promoter says there’s nothing to lose. Businesses should be on high alert with any ERC promoter who urged them to claim ERC because they “have nothing to lose.” Businesses that incorrectly claim the ERC risk repayment, penalties, interest, audit and other expenses.

Employers who improperly claimed ERC can avoid penalties and interest – and even get a discount on repayments if they apply by March 22, 2024, to the ERC Voluntary Disclosure Program. 

MADA Associate Member Highlight: Reynolds & Reynolds Document Services



Big things are happening with LAW®- the trusted source for standard automotive F&I documents

As a proud partner of the Michigan Automobile Dealers Association, Reynolds Documents Services is pleased to announce the launch of its brand new LAW website, LAW553.com, giving you unlimited access to a wealth of F&I knowledge. On the website, you can learn about: why we are the brand you can trust, our century-long history, the markets we serve, and the solutions we offer.

Unsure of where your dealership stands on F&I document compliance? No worries!

We now offer free F&I Document Reviews to help dealerships gain clarity on their compliance. The review involves the collection of all of your customer facing documents that are used in retail and lease deals and providing an assessment of how you can manage your compliance responsibilities. Don’t wait until it’s too late, now’s the time! 

contact info: LAW@reyrey.com or 800.344.0996

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