MADA Fast Facts

MDOS COMPLIANCE INSPECTIONS

Best Practice: Check That Managers Are Familiar with the Requirements of Your Dealer License

Compliance violations were a topic of discussion during a meeting last week with the Michigan Department of State (MDOS). From April 18 through October 18, 2023 (six months), general compliance inspections were conducted at 497 dealerships and 723 repair facilities; 3,305 violations were reported. Of these violations, 1,034 were reported as Class C violations (significant, with potential for probationary follow up). The additional 2,000+ violations were classified as Class A or Class B (need to be corrected, but less serious).

Many of the top violations were related to improper processes at repair facilities. Improper final invoice was the #1 violation reported (337), but there were many issues with mechanic certifications. Your service managers are reminded to check records on occasion to ensure all certifications are current and proper for the repairs being performed.

The top dealer violations continue to be the same issues reported year after year. Failure to apply for title in the accepted timeframe, failure to maintain records, including the police book, plus improperly completing the RD-108.

While continuing dealer and repair facility training is not required for Class A dealers -- it can be helpful. Especially for new employees who must be familiar with your regulatory requirements. (Dealership staff can sign up for free MDOS virtual training through the CARS e-services portal.)

MDOS has also created the following checklists that can be used for a quick reference of items that will be inspected.

A/B vehicle dealer checklist | Repair facility checklist 

EMPLOYEE RETENTION CREDIT

IRS announces withdrawal process for ERC claims

As part of a larger effort to protect small businesses and organizations from scams, the Internal Revenue Service announced the details of a special withdrawal process to help those who filed an Employee Retention Credit (ERC) claim and are concerned about its accuracy.

This new withdrawal option allows certain employers that filed an ERC claim but have not yet received a refund to withdraw their submission and avoid future repayment, interest and penalties. Employers that submitted an ERC claim that's still being processed can withdraw their claim and avoid the possibility of getting a refund for which they're ineligible.

The IRS created the withdrawal option to help small business owners and others who were pressured or misled by ERC marketers or promoters into filing ineligible claims. Claims that are withdrawn will be treated as if they were never filed. The IRS will not impose penalties or interest.

DECEPTIVE JUNK FEES

FTC and Wisconsin Take Action Against Dealer Group and Owners for Illegally Discriminating Against Customers

The Federal Trade Commission and State of Wisconsin are taking action against Wisconsin auto dealer group Rhinelander Auto Center, its current and former owners, and general manager Daniel Towne for deceiving consumers by tacking hundreds or even thousands of dollars in illegal junk fees onto car prices and for discriminating against American Indian customers by charging them higher financing costs and fees.

The defendants have agreed to proposed court orders that will require Rhinelander’s current owners and Towne to stop their unlawful practices and provide $1.1 million to be used for refunds to consumers.

In their complaint, the FTC and Wisconsin DOJ say that Rhinelander and Towne regularly charged many of their customers junk fees for “add-on” products or services without their consent. The complaint cites one survey of Rhinelander customers that shows half of the dealer’s customers said they were charged for add-ons without authorization or through deception. One consumer was told - deceptively - that Guaranteed Asset Protection (commonly referred to as “GAP,” or “GAP insurance”) was required for her car purchase, even though she didn’t want to buy it; it cost her more than $1,000 in fees and additional interest on her loan.

DEALER AWARDS

Nominations Requested for David F. Mungenast Sr. Lifetime Achievement Award

The American International Automobile Dealers Association (AIADA) is now accepting nominations for the 2024 David F. Mungenast Sr. Lifetime Achievement Award. This award is presented annually to a member of the international nameplate auto retail industry who embodies an unrivaled commitment to his/her dealership and employees, community, and family.

Please click here for more information. Nominations are due by Nov. 7.

MEMBER NEWS

Marquette GMC Hosts Drive Cancer Out Fundraiser

Marquette GMC is offering an opportunity to drive more than cars off the lot this month. The dealership is in its fourth year of the Drive Cancer Out fundraiser. Cassandra Herman, assistant business manager, said the dealership has raised more than $27,000 over the years of this event.

All money raised will be matched by the dealership, including a $5 donation for every signed and displayed pink ribbon. The money will be split between five U.P. families currently undergoing cancer treatment

In Memoriam: Connie Holzer

With sadness, we share that Connie Holzer, age 87, passed away unexpectedly on October 9, 2023 while in ltaly.

In 1974, Connie and her husband Tom Holzer moved to Michigan and established Tom Holzer Ford in Farmington Hills. She was known in the Detroit area for writing and starring in dealership commercials, and was recognized in 2013 by WJR as a Women Who Lead Honoree. Upon Tom's death in 2006, Connie ensured the dealership continued to thrive and served as CEO and Dealer until it's sale in 2022.

Visitation was held this week. Those wishing to make a memorial contribution are asked to consider the Paul Smith Golf Classic (Benefiting Detroit Children's Charities) or Gesher Human Services (formerly known as JVS).

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