view newsletter online  December 15, 2024

What are your thoughts?  I would love to hear back from you if you are excited for 2025, or if you think 2025 will be worse than 2024?  Email me at chad@randashautomt.com

At the end of the year, there is always a lot to get done to start the new year out right! Look over your inventory and if there are aged units that just have not sold, it would be a good idea to consult with your tax consultant or CPA and talk about options that you may have. Look over the items that you may have not looked at in a while. Have you called your main number listed on Google?  If so, if you have an auto-attendant that comes on before a “live” person picks up the phone, is that message relevant? Have you looked over and responded to the dealership reviews that are online?  Have you asked your most recent clients that you sold, to leave a review? What are your monthly sales goals for next year?  Are you stocked with the inventory count that you need to meet or exceed your sales goals right away in January? What does your ad spend per vehicle to get “eyeballs” on your product look like?  Is that amount spent per unit sold working for the dealership as it should?

December is the time to think about the dealership and what you want out of it for the next year.  Look over what you did over the last 12 months and ask yourself, is this what this dealership is capable of?  Are you satisfied with what the dealership did this year?  If you think that it can do better, now is the time to put those commitments on how it could be better on your bathroom mirror so that every day next year, it will remind you of what you thought you could get done. It should fire you right up to make those dreams you are having today, a reality in 2025!

Merry Christmas from my family to yours.

January of 2025 the next Montana legislature will kick off.  The Montana Independent Auto Dealers Association, as well as NIADA, will be on the watch for any upcoming legislative measures that will affect our industry.

One question I often here is, “What does the Association do for me?” I’m sure you have asked yourself that question, and I’m glad you asked. There are so many ways the Association is working behind the scenes to improve your opportunity to be successful that we could go through it for hours.

As with any endeavor, there is strength in numbers. With more numbers, there is more strength and clout. Our biannual legislative session begins in January and our influence and efforts keep legislation that is harmful to our industry from going through with no resistance. We send board members to Helena on your behalf to lobby for laws that are beneficial and oppose laws that can hurt us. We scan the docket daily looking for items that may affect you.

We are involved in the education of yours and your employees’ children by giving scholarships to deserving students. We have donated to Project Hope in the name of Independent Auto Dealer’s Association on your behalf and have put ourselves in front of bank presidents and other influential parties to explain the difference between a used car lot with no consideration for the community and our members that are dedicated to improving the independent dealer’s community.

We also have hours upon hours training available at any time and host our annual convention where you can learn from industry experts.

We send out monthly publications that include tips and legislative articles that keep you abreast of current and pending laws that will affect the car business on a national scale. There are 20 groups for retail and buy here, pay here dealers and so much more.

Message from Jeff Martin, NIADA CEO

Let me start by wishing you a Happy New Year. I am excited about what NIADA has in store for 2025 and the renewed optimism around the used car market.

The past few years have been challenging for our industry from higher interest rates, inventory constraints, rising insurance premiums, increased regulation and limited access to capital.

We know dealers have had to navigate a lot of challenges. But as an industry, we’ve more than persevered; we’ve thrived. For the second year in a row, independent automobile dealers will sell more used vehicles than franchise dealers. We’ve started to turn the corner on inflation with the start of the decline of interest rates by the Federal Reserve. Inventory has increased, bringing down prices. Most legal and compliance experts say we could see a significant reduction in “new” regulations. Lenders are talking about getting back into this space or growing their footprint.

In representing you and the industry, NIADA made great strides in 2024, and we look to continue the momentum in 2025.

Here is the start of what the association is working on for you in the upcoming year.

On numerous occasions, I have discussed what I feel is the most important responsibility of any trade association, growing its influence to better represent its members and protect the industry. NIADA took a major step forward in advocating for dealers and the independent auto industry in the past year, bringing aboard the lobbying firm Hance Scarborough to have a continual presence in Washington, D.C., and to remain engaged with lawmakers on pressing issues.

Throughout 2024, NIADA maintained an active dialogue with federal agencies, the Consumer Financial Protection Bureau, Federal Trade Commission and the IRS. All three attended the NIADA Convention and Expo to speak with and answer questions from dealers. During the NIADA Policy Conference, dealers visited the offices of the CFPB and FTC to continue conversations and develop a stronger working relationship that carries on into 2025.

Speaking of the Policy Conference, NIADA will join dealers and member affiliates once again in Washington, D.C., to take our message to Capitol Hill to meet with lawmakers and the federal agencies. The more than 100 attendees at this year’s policy conference had more the 200 meetings with lawmakers to discuss catalytic converter theft prevention, the right to repair and the CARS Act.

NIADA filed an amicus brief in the U.S. Fifth Circuit of Appeals last year on the lawsuit filed by the NADA and Texas ADA on the CARS Act. A stay remains in place on the onerous rule as a decision from the court awaits. But in the meantime, at conferences and through its publications, NIADA has continued to prepare dealers for the possible rule and has continued engaging lawmakers to curb its enforcement.

The advocacy efforts do not stop at Capitol Hill. NIADA has increased the size of the legislative committee to monitor legislation in different states impacting the industry. A coalition of NIADA partners and members helped push back efforts in Illinois to limit use of GPS and starter interrupt devices. NIADA has also voiced support for legislation in various states to make metal recyclers do lien searches before crushing vehicles.

As advocacy remains a top priority, NIADA remains dedicated to preparing dealers for the ever-changing market. Along with vast breakout sessions and panels on management, marketing, retail, BHPH and compliance at our June Convention, and dealer-led sessions at the BHPH Dealer Forum, NIADA is adding education opportunities in the new year. The popular certified master dealer program will offer top-of-the-industry training for retail and BHPH dealers. There will be several in-person classes debuted across the country covering topics from sales to service.

All these efforts to help dealers and move the industry forward would not be possible without you, the dealer member and partners. Our strength on Capitol Hill and with improving opportunities on Main Street, comes from your membership and participation in the association. Together we are stronger and we will show our might in 2025 to keep moving forward.

A federal judge in Texas Tuesday granted a preliminary injunction, putting the enforcement of the Corporate Transparency Act on hold just weeks before its filing deadline.

In the case Texas Top Cop Shop vs. Merrick Garland, Judge Amos Mazzant of the U.S. District Court of Eastern Texas stated the act was “likely unconstitutional as outside of Congress’ power,” and granted the request of an injunction to be applied nationwide. The ruling also stayed the Jan. 1, 2025, deadline for companies to file the Beneficial Ownership Information.

“[The CTA] represents Congress’s attempt to combat bad actors’ ability to cloak their criminal activities in a veil of corporate anonymity,” Mazzant wrote. “At its most rudimentary level, the CTA regulates companies that are registered to do business under a state’s laws and requires those companies to report their ownership, including detailed, personal information about their owners, to the federal government on pain of severe penalties. Though seemingly benign, this federal mandate marks a drastic two-fold departure from history. First, it represents a Federal attempt to monitor companies created under state law—a matter our federalist system has left almost exclusively to the several states. Second, the CTA ends a feature of corporate formation as designed by various states—anonymity. For good reason, plaintiffs fear this flanking, quasiOrwellian statute and its implications on our dual system of government. As a result, plaintiffs contend that the CTA violates the promises our Constitution makes to the People and the States. Despite attempting to reconcile the CTA with the Constitution at every turn, the government is unable to provide the court with any tenable theory that the CTA falls within Congress’s power. And even in the face of the deference the court must give Congress, the CTA appears likely unconstitutional. Accordingly, the CTA and its implementing regulations must be enjoined.”

Effective Jan. 1, 2024, the CTA requires many companies, including many NIADA dealer members, to report information about their beneficial owners to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). The information was due by Jan. 1, 2025 for entities in existence as of Dec. 31, 2023, and within 90 days of formation for entities that were formed in 2024.

 Required information to be reported in the initial BOI report about the reporting company includes: (a) its full legal name; (b) any trade names, “doing business as”, or “trading as” names; (c) the current street address of its principal place of business if that address is in the U.S., or, for reporting companies whose principal place of business is outside the U.S., the current address from which the company conducts business in the U.S.; (d) its jurisdiction of formation or registration; and (e) its Taxpayer Identification Number.

Required information to be reported in the initial report about each beneficial owner include: (a) the individual’s name; (b) date of birth; (c) residential address; and (d) an identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of identification document.

The penalties for filing false beneficial ownership information or for failure to report or update beneficial ownership information are: (i) civil penalties of $500 for each day that the violation continues or has not been remedied; and (ii) a criminal fine of up to $10,000, imprisonment for up to two years, or both.

FinCEN issued a statement on the ruling.

“In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports,” FinCEN said.

The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on Dec. 5, 2024.

Like their customers, each dealer has their preferences when it comes to buying cars.

The determination on which cars to buy in the auction lanes and which ones to keep at the lot and sell can be impacted by many factors from profitability, maintenance and customer choice.

During a recent 20 Group meeting, dealers from across the nation shared their thoughts on what they look for in building their inventory and developing their own buy and no-buy lists for their stores. Here are some of their key takeaways.

Know your market

The types of vehicles filling your lot today may not be the same as the dealerships in Florida, Texas or New York.

“It’s about what works for each location and clientele,” said Brad White, 20 Group Moderator and Consultant.

 Melissa McCown of Mi Amigos in Houston, Texas, has found success with selling heavy-duty work trucks to laborers, who are consistently among her best-paying customers.

“The customers needing work trucks are paying me before anyone else,” McCown said.

In Miami, Florida, Leceour Charles of Mission Auto has a different market with many immigrant customers, needing sedans.

“You have to look at the market and who you are trying to tailor to and the demographics of your area,” he said. “Where we are it’s a lot of Toyota Corollas. That’s the market we serve.”

Use recon to make profit

In rural Kentucky, Keith Thacker of Autoland has found value in buying Nissans that need new transmissions or engines and repairing the vehicles before selling.

He explains he’s buying many of the vehicles for less than $3,000 and putting the necessary factory parts in for a total cost of $6,000. He pointed out it puts a better and more reliable vehicle on the street for the customer and creates a better-paying customer.

“We’re selling the best car for the ACV we sell and we’re making money on the recon. We end up with a better car than going through the lane and we win by making more money.”

Don’t base choices strictly on personnel

You may find you have people in your shop that may specialize in a particular vehicle but that doesn’t mean you tailor your inventory to that individual’s skillset. If an employee leaves, it may be difficult to find a technician or mechanic who can take over working on a specialized vehicle.

“Employees unfortunately come and go and techs come and go,” said Mike Clark, Jr., of C&C Cars in Pinellas Park, Florida. “You have to stick with the things that are proven to make you money. We buy the same stuff over and over again so our techs know what’s coming in and the known problems to get it fixed and out to the line quicker. I wouldn’t recommend buying a car just because your tech likes it or GM likes it. Let’s look at the data and see what works.”

Be flexible

Trends and markets evolve quicker. Different models may become popular in an area or costs may change, impacting profitability.

Dealers need to stay looking at their wholesale costs, sales prices, reconditioning costs and pay history with customers regularly and adapt their buy and no-buy lists accordingly.

“I look at my buy list constantly,” Thacker said.