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Dealers urged to maintain efforts on CFPA

November 15, 2010

By Ray Scarpelli Sr., Metro Chicago NADA Director

Dealers from across the country gathered in the nation’s capital in September for the NADA’s annual legislative conference. Congressman Barney Frank (D-Mass.), who chairs the House Financial Services Committee, said he plans to exclude auto dealers from being regulated by the provisions of the proposedConsumer Financial Protection Agency (CFPA).

Dealers who visited Capitol Hill told their congressmen that auto financing should not come under the authority of the new agency as it is already regulated by other federal agencies and the states. Under the proposed CFPA, any business that extends credit—whether a discount retailer providing layaway services or a lawyer or doctor who allows a client or patient to carry a tab—would be subject to new rules.

Although the NADA was pleased by Rep. Frank’s announcement, many legislative hurdles remain. The NADA urges dealers to continue to contact their members of Congress to encourage them to exclude auto financing from this legislation.

In other legislative and regulatory news . . .

IRS Offers New Directive on UNICAP

The IRS industry director, Heavy Manufacturing and Transportation, Large-and-Mid Size Business Division, issued a memo Sept. 15 offering auditors direction on conducting Uniform Capitalization audits of franchised dealers. The memo, "Tier II—Field Directive on the Planning and Examination of IRC § 263A issues in the Auto Dealership Industry," is not official law or the IRS’s position, but it includes an "audit tool kit."

Further, the memo notes that the IRS is suspending examination of § 263A issues—UNICAP issues—through 2010 "to encourage compliance" and to let dealer-taxpayers "voluntarily change their methods of accounting to comply with the legal reasoning outlined in [a September 2007 Technical Advice Memorandum]." The memo also addresses UNICAP examinations in progress. Dealers should consult with their tax practitioner about this development. More news is at

Get Ready for the Flu

The Small Business Administration is encouraging small business owners to create a plan and talk with their employees to make sure everyone is ready forwhat’s expected to be a bad flu season. Even having one or two employees out for a few days can adversely affect operations and the bottom line, says SBA administrator Karen Mills. To help employers, the SBA created a flu preparedness guide. It includes tips on writing a continuity plan for operations as well as measures to help keep employees healthy. It’s available at 

In NADA news . . .

The NADA Is ceasing publication of AutoExec Magazine. In announcing the decision to close the 81-year-old publication, NADA president Phil Brady said: "A long-term downturn in print advertising, coupled with the unprecedented restructuring in the automobile industry and a pronounced shift toward online communications, necessitated the decision. The NADA has been very fortunate to have had high-quality professionals producing an award-winning print magazine for so many years, and I want to emphasize that this decision is in no way a reflection on the AutoExec staff." The NADA will move forward with a new emphasis on online communications.

A Florida dealer has won the latest Energy Star Small Business Award. Preston Hood Chevrolet, in Fort Walton Beach, Fla., was one of just seven businesses nationwide chosen by the EPA for the annual award. Employees there formed a Green Team 18 months ago and used the NADA/Energy Star publication, "Putting Energy into Profits," as a guide. They targeted lighting by using fewer bulbs, rewiring to cut wattage by 50 percent, increasing natural lighting, and installing occupancy sensors and photocell controls. They also replaced AC and heating units with Energy Star–rated equipment. In all, the dealership cut electricity by 12 percent last year, saving $16,000, and cut gas heating costs by 34 percent, saving $7,000. They also launched a recycling program.       

"Changing the way a company does business after 40 years is a challenge, to be sure, but Preston Hood Chevrolet has a legacy of being a committed community partner, and we felt starting this energy-saving program was the right thing to do for the area we call home," said Taylor Hood, general manager.

The NADA is cosponsoring a special Dealer Day event on Nov. 4, during the annual Specialty Equipment Market Association (SEMA) show in Las Vegas. This one-day conference is designed to give dealers the knowledge they need to successfully integrate an accessory sales program into their stores. (Aftermarket sales amount to nearly $32 billion a year.) A dealer panel and other industry experts will discuss various topics, including strategies to speed accessory sales, integrating accessory sales into the sales process, and increasing used inventory turns with accessorizing. Advance registration is $75.