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No extra $500 dealer fee in 2015

October 24, 2014
Dealership personnel who are sifting through the paperwork to renew the business’s annual license from the Illinois secretary of state will search in vain for the Dealer Recovery Trust Fund Affirmation form. The reason: The extra $500 needn’t be paid in 2015.
 
With a $4.2 million balance as of Aug. 31, the fund is considered to be fully endowed. According to statute, the charge will be resurrected only if the fund balance dips below $3.5 million.
The trust fund, created by the Illinois attorney general’s office in the waning days of the country’s financial slide that began in 2007, is an attempt to help dealers and consumers harmed by dealerships that go out of business without satisfying trade-in liens. The fund was endowed by collecting an extra $500 for annual dealer licenses.
Since its operation, the only payouts have been for a handful of claims and for insurance policies, annual audits, and bank charges for NSF checks.
According to the fund’s 2011 statute, if the fund balance exceeds $3.5 million on Aug. 31 of any given year, collection of the fee would be suspended the following year for dealers who did not have a claim paid from the fund; or a suspended or revoked license; or have any civil penalties assessed against them during the previous three years.
Consumers and dealers can file a claim against the fund if they purchase a vehicle on or after Oct. 1, 2011, from a dealer who goes out of business without satisfying a trade-in lien. A claim cannot exceed $35,000.
A dealer who sells 25 or fewer vehicles a year is exempt from the $500 fund surcharge. The Dealer Recovery Trust Fund Board, which oversees the fund, is comprised of the Illinois attorney general and secretary of state, or their delegates; and someone to represent "Illinois automobile dealers" who alternately comes from the ranks of franchised and independent dealers.
The CATA and the IADA, involved in shaping the legislation, were able to steer endowment of the fund toward a hike in dealer licenses and away from more costly surety bonds.
 
 

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