Issue 2 2026 Official Publication of the New Jersey Coalition of Automotive Retailers 2025-2026 SPECIAL LEGISLATIVE EDITION
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table of CONTENTS NJ CAR BOARD OF TRUSTEES BY REGION NORTHERN REGION I (Bergen, Essex, Hudson, Passaic, Sussex) Mark Abaid (Alt.) Joseph Agresta, Jr. (Alt.) Timothy Allocca Jeffrey Brown John Fette Matthew Haiken (Alt.) William Kundert, Jr. Brian Lam Reneé P. McGuire Richard Selman Todd Van Duren NORTHERN REGION II (Hunterdon, Morris, Somerset, Union, Warren) Gregg Ciocca, Jr. William Feinstein David Ferraez Chris Gilbert (Alt.) John Johnson, Jr. Sean Lyons Mark Montenero Chris Preziosi, Jr. (Alt.) Edward J. Rossi William Strauss, III Stephen Tilton CENTRAL REGION (Middlesex, Monmouth, Ocean) Dan Chuhinko Robert Ciasulli Lisa Ocasio Devivo Kevin DiPiano (Alt.) Garry Foltz Adam Kraushaar Robert Larson Shelly Locascio Tyler Schmelz Anton Semprivivo Robert Sickel SOUTHERN REGION (Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, Salem) Doug Burke Allen Eastlack (AJ) (Alt.) Jason Elkins Jeremy Fisher Thomas Hessert, III Steven Kindle Stacey Lilliston Marcy Maguire Mark Miller Robert D. McCormick NJ CAR Executive Committee and Board of Trustees 2026 A. Andrew Shapiro...........................................................................Chairman Ed Barlow, III............................................................................Vice Chairman Michael P. DeSilva............................................................................ Secretary David Kull. ......................................................................................... Treasurer Jordan Wright.........................Regional Vice President (Northern Region I) Michael DiFeo.......................Regional Vice President (Northern Region II) Richard Malouf, Jr........................Regional Vice President (Central Region) Russel Abate.............................Regional Vice President (Southern Region) Ronald E. Baus, Jr................................................................Budget Chairman Eric Nielsen..........................................NJ CAR Insurance Co. Ltd. Chairman Richard A. DeSilva, Jr.....................................NADA Director for New Jersey Robert Larson...............................................NJ CAR Services, Inc. President Frank M. Pezzolla...............................................Truck Committee Chairman Judy Schumacher-Tilton..................................................CAR-PAC President Thomas DeFelice, III........................................................NextGen Chairman Laura C. Perrotta. ............................................................................. President 6 The Passage of the Motor Vehicle Open Recall Notice and Fair Compensation Act A Victory for Consumers and Auto Technicians BY LAURA PERROTTA 8 CRA Repeals and Recall Legislation Updates BY LAURA PERROTTA 10 Reflections on the TAP Pilot Building a Stronger Pathway for Automotive Technicians BY BRANDON JURAKHAN 12 The Future of TAP Bootcamps Across New Jersey BY BRANDON JURAKHAN 14 Assuring DMS-Generated Contracts Comply with Law Who Bears the Risk? BY LAURENCE SMITH, ESQ. 16 Preserving the Vehicle Trade‑in Tax Credit How NJ CAR Created a Coalition to Fight the Governor’s Terrible Idea BY MAGDALENA PADILLA, ESQ. 18 Let’s Celebrate Advancing Safety and Fair Pay BY RON E. BAUS, JR. 20 NJ CAR & Dealers Making a Difference Philanthropy, Highlights, and Grassroots 26 New Jersey Franchised New Car & Truck Dealerships By Legislative District ©2026 New Jersey Coalition of Automotive Retailers (NJ CAR) | MBR Connect, formerly The newsLINK Group LLC. All rights reserved. New Jersey Auto Retailer is published four times per year and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of NJ CAR, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. New Jersey Auto Retailer is a collective work, and as such, some articles are submitted by authors who are independent of NJ CAR. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. EDITOR: BRIAN HUGHES PUBLISHED BY MBR CONNECT, FORMERLY THE NEWSLINK GROUP LLC (855) 747-4003 Official Publication of 4 NEW JERSEY auto retailer
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It’s remarkable how fast 2025 has gone by, filled with impactful developments that affect the auto industry nationally and locally. As I reflect on the many accomplishments of NJ CAR during the past year, I feel a sense of pride because of the important passage of one of the most comprehensive warranty labor time laws in the United States. The passage and enactment of the “Motor Vehicle Open Recall Notice and Fair Compensation Act” (A4380/S3309) (P.L. 2025, c.140) is a tremendous accomplishment for NJ CAR. While there are numerous provisions, its name signifies two of the main features of the law, which are to 1) Provide enhanced notification to consumers about open recalls, and 2) Establish a process for the fair compensation of automotive technicians through their dealerships. Another important aspect of the law is amending the New Jersey Franchise Practices Act (NJFPA) to grant standing to NJ CAR to sue on behalf of dealers if there is an alleged violation of the NJFPA by manufacturers. SAFETY RECALL NOTICE In 2024, the National Highway Traffic Safety Administration (NHTSA) ordered automakers to recall 27.7 million vehicles across the United States. Approximately 1.4 million vehicles in New Jersey today are being operated on the roadways with unresolved safety or emissions recalls. The new law requires that when the New Jersey Motor Vehicle Commission (NJMVC) issues motor vehicle registration or registration renewal notices to New Jersey consumers, it must also notify them that the NHTSA maintains a database whereby consumers can determine if their motor vehicle is subject to an open recall. This “Open Recall Notice” must also include a link to the NHTSA database and a statement indicating that each open recall may be repaired at no cost to the consumer by a franchised new car dealer approved by the manufacturer. The NJMVC may apply for monies, including through federal grants, to fund this process. The law also provides that manufacturers who do business in the State must assist by LAURA PERROTTA, President, NJ CAR The Passage of the Motor Vehicle Open Recall Notice and Fair Compensation Act the NJMVC with the application for funding. The chief administrator may require manufacturers who conduct business in the State to pay a fee to fund the implementation. FAIR COMPENSATION FOR WARRANTY AND RECALL WORK For many years, it has been the practice of manufacturers to manipulate the time it takes to complete a repair under warranty or recall. This manipulation often takes the form of a reduction in the number of hours it takes to make a repair immediately before a significant recall is announced. Dealers were also subjected to time guides established by the manufacturer, which were set in pristine conditions that do not consider the rigors of the average dealership service facility. These imbalances required a change in the law, which the “Motor Vehicle Open Recall Notice and Fair Compensation Act” sought to address. A Victory for Consumers and Auto Technicians 6 NEW JERSEY auto retailer
The law requires manufacturers to compensate dealers for warranty and recall work at the same rate a retail customer pays for the same repair, accomplishing this by allowing the dealership to set its own average retail labor time allowance to be paid by the manufacturer. The law also allows the dealership to establish its own multiplier by: “… taking the number of hours billed in 100 sequential customer-paid service repair orders or 90 days of customer paid service repair orders, whichever is less, covering repairs made no more than 180 days before the submission, and dividing that by the numbers of hours permitted by the motor vehicle franchisor for any such repairs under the motor vehicle franchisor’s labor time guide for franchisor-paid repairs or service. The resulting quotient shall be applied to the motor vehicle franchisor’s labor time guide to establish the motor vehicle franchisee’s average retail labor time allowance.” In practice, the law requires a step-by-step procedure to establish a dealer’s labor time allowance. These steps are summarized as follows: • STEP 1 — Dealer takes 100 sequential customer-paid repair orders or 90 days of customer-paid repair orders, whichever is less, to establish their own multiplier. Only repairs made no more than 180 days prior to submission of the claim can be considered. ◽ This is not applicable to all exclusions listed by the law, including routine maintenance, as well as all lines without an operations code in the manufacturer’s time guide. • STEP 2 — Dealer would then add up all the hours of labor time for the 100 sequential customer-paid repair orders. ◽ That number is your NUMERATOR. • STEP 3 — Dealer would then add the OEM labor time hours from the manufacturer’s time guide with correlating operations codes to the customer pay work for the 100 repair orders they are analyzing. ◽ That number is your DENOMINATOR. • STEP 4 — Dealer would then divide the hours in the numerator by the hours in the denominator to establish the dealership multiplier that would be applied to all warranty and recall work, which is all based on customer-paid repair orders. It is worth noting that this process can be tedious for dealerships to calculate on their own. Therefore, it is recommended that dealerships use a credible warranty reimbursement firm to help submit a proposal to their manufacturer to establish their labor time allowance. In anticipation of the law’s effective date, April 1, 2026, NJ CAR has partnered with ARMATUS and WITHUM to help educate our members about the submission process serving as an option to provide their services if members choose. STANDING As a trade association that represents 530+ franchised neighborhood new car and truck dealers in New Jersey, we take pride in advocating for our members. That advocacy often involves the State Legislature, but sometimes litigation is required to protect the interests of the association’s members. Unfortunately, NJ CAR met roadblocks on the issue of standing in recent cases brought both in Federal and State courts. New Jersey case law has a liberal treatment of associational standing. However, the New Jersey Supreme Court recently ruled in N.J. Coal. of Auto. Retailers, Inc. v. Ford Motor Co., 261 N.J. 348 (2025), that NJ CAR could not bring action under the NJFPA using associational standing because the statute states that franchisees are the only ones who can bring actions against their franchisor for violations of the NJFPA. Amending the NJFPA to grant standing to NJ CAR was essential to allow the association to freely advocate for its members in court on important issues that arise under that statute. However, the law is not retroactive and does not apply to causes of action that originated prior to April 1, 2026. SPECIAL THANKS The passage of this law would not have been possible without the hard work of many stakeholders, including automotive technicians, unions, warranty reimbursement professionals, and finally, NJ CAR staff. I also want to point out the invaluable role the grassroots efforts of NJ CARPOOL played in securing the law’s passage. I encourage dealers to continue participating in NJ CARPOOL as it is a very valuable tool. Enacting the “Motor Vehicle Open Recall Notice and Fair Compensation Act” is the first step toward achieving roadway safety by providing the timely repair of vehicles under recall and providing a clear process for fair compensation for automotive technicians. 7 NEW JERSEY auto retailer
From the start of the new year, 2025 required that NJ CAR rev up its forces to achieve success in our two hottest priorities! The beginning of the year was hectic. While the new year highlighted how federal and state policies impact our dealers, it did not reveal an easy path to victory for our members. Navigating the federal and state legislative processes to produce solutions was demanding, but NJ CAR engaged and was part of the solution at both levels. MOTOR VEHICLE OPEN RECALL AND FAIR COMPENSATION ACT, AND FRANCHISE PRACTICES ACT We faced two contrasting arenas. While we were dared by a new U.S. Republican President who championed nullifying federal electric vehicle mandate policies, at the state level, we faced a term-limited New Jersey Democrat Governor who envisioned state environmental policies as part of his legacy. Also at the state level, we confronted a state Legislature that supported the Motor Vehicle Open Recall and Fair Compensation Act, our bill to amend the Franchise Practices Act to better address open recalls, provide fair compensation to technicians, and provide litigation standing for NJ CAR to better protect its members’ interests in court. Still, the bill had not moved since it was introduced in 2024. NJ CAR stepped up to protect our members’ interests in each arena. We thank our members for joining us in this battle to secure our successes for these two priorities by the end of June 2025! Failure in either of our priorities would have had devastating effects on our truck and auto dealers. By the time of this writing, NJ CAR can report that the priorities have been successfully addressed! EV MANDATES AND CONGRESSIONAL REVIEW ACTS One priority was to nullify the overreaching EV mandates from California adopted by New Jersey that posed an existential threat to our truck and auto dealers. Mission accomplished! These California mandates had been adopted by 11 other states, representing one-third of the auto market in the United States and crippling the dealers in each of them. NJ CAR hosted numerous meetings with state legislators, encouraging them to use their authority to nullify the state regulations. They were reminded of the detrimental impacts these EV mandates would have on our dealers and advised that these negative results would undermine the significant contributions made by our dealers in local and statewide economies. However, despite these facts, the state Legislature offered no relief from the mandates. In contrast, NJ CAR’s efforts on the federal side were successful. Adapting to the opportunity presented by new federal leadership seeking to nullify the EV mandates from California, NJ CAR activated its NJ CARPOOL grassroots program and also contacted the New Jersey Congressional delegation to urge that Congress support the passage of the Congressional Review Act Resolutions for an ultimate signature by the President. Signed by President Trump on June 12, 2025, these three resolutions ended the EV mandates facing consumers in New Jersey: H.R.J.88, rescinding the waiver that enabled the California Air Resource Board (CARB) to impose California’s EV sales mandates on states like New Jersey; H.R.J.87, eliminating the EV mandate that required truck manufacturers to sell an increasing percentage of zero-emission medium and heavy-duty vehicles beginning 2024, eventually reaching 100% zero-emission vehicle sales by 2036; and H.J.Res.89, nullifying the Omnibus Low NOx Rule that requires new diesel emission standards beginning in 2024. NJ CAR was part of that effort, and we thank our members who joined us in this federal campaign. We achieved success in our other top priority, too! We worked hard to urge the State Legislature to pass the Motor Vehicle Open Recall and Fair Compensation Act before the start of the summer legislative break on June 30, 2025. The goal was to have the bill sent by June 30th to the Governor’s desk for his signature. Mission accomplished! NEXT STEPS AND LOOKING FORWARD Though a priority bill for NJ CAR with bipartisan sponsorship in the Legislature, the bill had not moved since it was introduced. The Assembly (A4380) and Senate (S3309) versions of the bill had been introduced on May 16, 2024, and May 20, 2024, respectively. However, starting March 6, 2025, both bills received committee hearings, were amended, substituted, and posted for a final vote in both houses by June 30th. Despite oppositional efforts by the manufacturers, NJ CAR succeeded in encouraging the Legislature to approve the bill for final passage and it now was signed by the Governor. We thank our members who joined us in various meetings, testified with us at various legislative committee hearings, and voiced their support privately to legislators, further urging that they support our bill. by LAURA PERROTTA, President, NJ CAR CRA Repeals and Recall Legislation Updates 8 NEW JERSEY auto retailer
Reflections on the TAP Pilot Building a Stronger Pathway for Automotive Technicians by BRANDON JURAKHAN, Workforce Development Manager, NJ CAR The Technician Advancement Program (TAP) pilot has provided invaluable insights into how to create a sustainable, scalable, and impactful pre-apprenticeship initiative for aspiring automotive technicians in New Jersey. As we reflect on this foundational phase, several key pillars have emerged: specialized instruction, strategic dealership partnerships, digital outreach, community engagement, and securing external funding to support long-term growth. NJDOL AWARDS NJ CAR WITH PACE GRANT FOR TAP A major milestone during this pilot phase was securing a grant from the New Jersey Department of Labor & Workforce Development (NJDOL). This funding is a significant endorsement of TAP’s mission and provides essential resources to expand and enhance the program. With the Pre-Apprenticeship in Career Education (PACE) grant awarded to NJ CAR for TAP, we can invest more deeply in core components such as instructor development, curriculum enrichment, trainee support services, and strategic outreach efforts. This backing enables us to accelerate our efforts to build a robust talent pipeline for New Jersey’s automotive industry. KEY TAKEAWAYS FROM TAP PILOT One of the most important takeaways from the TAP pilot is the critical need for instructors who can simplify complex automotive concepts. As vehicle technology becomes more advanced and brand-specific, it’s not just technical knowledge that sets an instructor apart — it’s the ability to break down sophisticated systems into clear, understandable lessons that trainees can apply in real-world settings. The best instructors are not just experts; they are effective communicators and skilled mentors who make learning accessible and engaging. Because of the grant awarded by the NJDOL, we’re now positioned to recruit certified trainers through manufacturer partnerships and invest in the professional development of existing educators. This ensures our students receive high-quality instruction that turns complexity into confidence: an essential ingredient for long-term success in the field. Cultivating strong relationships with dealerships willing to commit to hiring and mentoring TAP graduates is equally essential to measuring the program’s effectiveness. The pilot of this program highlighted the value of dealership engagement not only for job placement but also for long-term career development. By partnering with dealerships that understand and invest in apprenticeship pathways, we can bridge the gap between foundational training and full-time employment. With this funding, NJ CAR is enabled to allocate resources to strengthening these partnerships — both trainees and dealerships are supported throughout the process. LOOKING FORWARD TO EXPANDING AND SCALING TAP IN NEW JERSEY In today’s digital-first environment, the pilot demonstrated the power of online tools to reach a broader, more diverse group of candidates. Traditional recruitment alone cannot meet the needs of an evolving and highly mobile workforce. Through targeted digital advertising, engaging social media campaigns, virtual open houses, and user-friendly application platforms, we have seen increased visibility and interest in TAP. The support of this grant allows us to further enhance our digital strategy to ensure our messaging reaches underserved and underrepresented communities across the State. Perhaps most importantly, the pilot highlighted the significance of deep community engagement. Local leaders such as educators, civic advocates, and workforce boards play a vital role in connecting us to potential trainees and fostering trust within their communities. These relationships ensure that TAP is not just a workforce training program but also a meaningful effort in community empowerment and economic development. The PACE grant also supports the expansion of these efforts, allowing us to build stronger local networks and increase outreach in communities where opportunity and access are most needed. The TAP pilot has laid the groundwork for a transformative initiative. With lessons learned, strong partnerships formed, and the PACE grant, we are well-positioned to scale our efforts. By investing in specialized instruction, forging deep employer relationships, embracing modern outreach methods, and partnering with local communities, TAP is set to become a powerful vehicle for workforce development and career advancement across New Jersey’s franchised new vehicle auto retail industry. 10 NEW JERSEY auto retailer
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The Future of TAP Bootcamps Across New Jersey by BRANDON JURAKHAN, Workforce Development Manager, NJ CAR The Technician Advancement Program (TAP), powered by NJ CAR, is more than just an educational initiative; it’s a statewide movement to address the urgent need for skilled automotive technicians while providing individuals with a clear, supported pathway into a rewarding career. With the success of our initial camps, TAP is poised to grow significantly in the coming months. We are excited to share what the future holds, thank the dealerships stepping up to host bootcamps, and highlight the powerful stories of students already benefiting from this program. BUILDING THE FUTURE OF TAP ACROSS NEW JERSEY The demand for skilled automotive service technicians is not slowing down. In fact, according to labor projections, New Jersey will need thousands of new technicians over the next decade to keep pace with the retirement of existing technicians and the growing demand for vehicle service. Recognizing this critical need, NJ CAR launched TAP as a pre-apprenticeship training program designed to equip participants with the technical skills, professional training, and real-world experience required to thrive in the field. The program provides 288 hours of instruction split between the classroom, teaching, and hands-on shop experience. Students meet four evenings a week, balancing lessons with a hands-on application of what’s taught on real vehicles in dealership service bays. This learning model results in a practical, fast-tracked training experience that prepares participants for entry into a registered apprenticeship or direct employment with franchised new vehicle dealerships. TAP would not be possible without strong partnerships, and NJ CAR is proud to partner with the New Jersey Department of Labor & Workforce Development (NJDOL), which awarded a $664,500 Pre-Apprenticeship in Career Education (PACE) grant to help expand TAP statewide. This investment provides students with critical support, including a $200 weekly stipend to offset living and travel costs during training, as well as a professional-grade toolbox — valued at over $3,000 — filled with essential tools students receive upon graduation from the program. These benefits ensure that financial barriers do not prevent motivated individuals from pursuing a career in automotive technology. Looking ahead, future TAP bootcamps will be rolled out across multiple counties in New Jersey, ensuring that location is never an obstacle to opportunity. The latest bootcamp in Newark recently launched, and a class in Manahawkin has already been confirmed as the next site, starting in January. There are several dealerships in Camden, Essex, and Middlesex counties currently under consideration as potential hosts for future bootcamps. Our vision is clear: Within the next few months, TAP will have active training sites across the State to ensure that anyone interested in pursuing this career has access to high-quality, no-cost training close to home. THANKING THE DEALERSHIPS THAT MAKE IT POSSIBLE None of this growth would be possible without the dealerships stepping forward to host TAP bootcamps. It takes commitment to open up service bays, lend equipment, and provide support instruction, yet dealerships across New Jersey are showing just how invested they are in closing the gap on the technician shortage. 12 NEW JERSEY auto retailer
AS WE EXPAND TAP TO MORE LOCATIONS ACROSS NEW JERSEY, WE ARE GUIDED BY THE MISSION TO CONNECT MOTIVATED INDIVIDUALS WITH THE TOOLS, TRAINING, AND OPPORTUNITIES THEY NEED TO SUCCEED IN THE AUTOMOTIVE INDUSTRY. By becoming host sites, dealerships not only help students, but they also directly address their own workforce needs. Every camp creates a pipeline of entry-level technicians who are trained in a dealership environment so they are already comfortable with the pace, expectations, and culture of the service department. This creates a smoother transition from training into full-time employment, thus reducing turnover and giving dealerships a competitive edge in a challenging labor market. We extend our deepest gratitude to the dealerships that have already partnered with TAP, as well as to those currently considering it. Your investment in training the next generation of automotive professionals is both practical and inspiring. You’re not just filling jobs; you’re building careers and shaping the future of the industry in New Jersey. STUDENT SUCCESS STORIES: REAL IMPACT, REAL OPPORTUNITIES While numbers and projections matter, the real impact of TAP is best seen in the lives of the students who are participating right now. Their journeys show just how transformative this program can be. Take Zakia, for example: She began her journey studying automotive technology at her local community college. While classroom lessons gave her a foundation, she quickly realized she was missing real, hands-on training. She found this in TAP. Within just a few weeks of joining the bootcamp, Zakia was confidently performing basic maintenance tasks and was building the practical skills she’d been seeking. Now, she sees herself working in a dealership service department and is determined to continue her training to become a master technician! Then there’s Jeremiah, who comes to class after working as a pest control technician. He was searching for more stability, better earning potential, and a career where he could truly grow, but he didn’t know where to start. TAP gave him that direction. Training on real vehicles inside a dealership and learning directly from experienced professionals gave him the confidence and hands-on skills he needed. Today, Jeremiah not only has valuable experience to add to his resume, but he also has an interview lined up with a dealership upon graduation. For him, TAP isn’t just training; it’s the first real step toward building a lifelong career. These stories demonstrate that a student’s willingness to learn — combined with a determination to succeed — is more valuable than having prior experience. This is the true heart of TAP: Providing the structure, training, and opportunities students need to turn their determination into a lifelong career. WHY TAP MATTERS TO COMMUNITIES TAP is not just about filling positions; it’s about strengthening communities. Every graduate who finds employment represents not only a personal success story but a positive impact on their family and neighborhood. Stable, good-paying careers reduce unemployment, improve local economies, and create role models for others seeking a pathway forward. Automotive technology is evolving rapidly, and today’s technicians are not just turning wrenches; they are working with advanced diagnostics, electric vehicles, hybrid systems, and complex computer-driven systems. This makes TAP even more valuable by ensuring that New Jersey communities have local technicians trained in the skills of the future, ready to keep vehicles safe and reliable. LOOKING AHEAD As we expand TAP to more locations across New Jersey, we are guided by the mission to connect motivated individuals with the tools, training, and opportunities they need to succeed in the automotive industry. Our future bootcamps will continue to focus on accessibility, ensuring that cost, geography, or lack of experience are never a barrier. By committing to strengthening our partnerships with dealerships, community organizations, workforce development boards, schools, and state agencies like NJDOL, we can ensure that TAP continues to grow and evolve, reaching more students, preparing more technicians, and supporting more dealerships every year. A FINAL WORD OF THANKS To our dealership partners: Thank you for stepping up. Your leadership makes TAP possible, and your commitment ensures its success. To our students: Thank you for taking the leap. Your courage and hard work prove every day why programs like TAP matter. To our broader community of supporters: Thank you for believing in this vision. Together, we are building not just careers, but futures. NJ CAR’s TAP initiative is more than a bootcamp; it’s a movement to transform lives and strengthen the automotive industry across New Jersey. This is only the beginning. 13 NEW JERSEY auto retailer
Assuring DMS-Generated Contracts Comply with Law Who Bears the Risk? by LAURENCE SMITH, ESQ., Day Pitney, LLP Of significant value to auto dealers are the form agreements, such as retail purchase agreements and retail lease agreements (collectively, “Buyer’s Orders”), generated by their dealer management system (DMS) software. Buyer’s Orders generated by DMS software often vary by state and contain state-specific statutory references, which create the reasonable expectation that those Buyer’s Orders comply with the laws of the state in which they are intended to be used. This expectation is reinforced if the DMS vendor controls the forms of the Buyer’s Order, and the dealer is not at liberty to revise them without the approval and, perhaps intervention of the DMS vendor. It is imperative that Buyer’s Orders comply with applicable state law for a variety of reasons. If Buyer’s Orders do not comply with the law, the dealer utilizing them risks being investigated by the state attorney general and may suffer damage to its reputation and goodwill. Furthermore, the consequences of non-compliance may be significant since a Buyer’s Order is used in each sale or lease of a vehicle by a dealership, which means that any problem with the underlying form of Buyer’s Order will likely affect a large percentage of dealership customers. Additionally, for certain violations of law, state consumer fraud, or consumer protection statutes may impose statutory damages that exceed the actual loss sustained by a customer as a result of the Buyer’s Order not complying with law in some respect. See, e.g., the New Jersey Consumer Fraud Act codified at N.J.S.A. 56:8-1 et seq. If a Buyer’s Order generated by DMS software does not comply with the law, who should bear the risk and consequences of non-compliance: the DMS vendor or the dealer? The predictable response of a DMS vendor, perhaps reflected in the form of master agreement that it utilizes with dealers, is that the dealer is responsible for ensuring it conducts business in compliance with law, and that obligation extends to the contracts that the dealer uses in its day-to-day operations. At first blush, it seems reasonable for a DMS vendor to maintain this position; the fact that the DMS software is the conduit for many dealership transactions should not, from the DMS vendor’s perspective, absolve the dealer of the obligation, common to all business owners, to operate its business in compliance with law. However, upon closer analysis, a compelling argument can be made that it is inequitable to foist upon a dealer the risk that a DMS-generated Buyer’s Order does not comply with the law. DMS software is the lifeblood of a dealership. A dealership relies upon the software to perform or enable many critical functions and pays a substantial fee for that functionality. Just as a dealer should not be required to troubleshoot a software defect that prevents the DMS from communicating properly with a factory or generating accurate financial statements, the dealer should not be required to ascertain whether a Buyer’s Order generated by DMS software complies with the law. Especially for a dealer with sister stores in other states, 14 NEW JERSEY auto retailer
with the Buyer’s Order for each state containing specific statutory references, it likely would not occur to the dealer to review a Buyer’s Order to ensure it complies with the law of the jurisdiction in which the dealer is operating; compliance with law is reasonably implied by the very contents of the Buyer’s Order. Even if a dealer were inclined to undertake a review to ensure a Buyer’s Order complies with law, the dealer will likely find that it has no ability to revise the form of Buyer’s Order, both due to software limitations and protections afforded under federal or state copyright law. Considerations of economic efficiency also militate in favor of the DMS vendor taking on the compliance-with-law risk relating to Buyer’s Orders generated by its software. A numerical example is illustrative. Assume that the initial cost to a DMS vendor to prepare a form of Buyer’s Order and ensure that it complies with applicable state law is $10,000 and that the annual cost thereafter to monitor changes in the law and make any necessary revisions to the Buyer’s Order is $1,500. Assume further that a DMS vendor has only 10 dealer customers in each state in which the vendor licenses its software. Even if the DMS vendor were to pass along these “compliance with law” costs to its dealer customers, the tithe to each dealer would be $1,000 upfront and $150 annually thereafter. Compare that to the cost each dealer would have to incur (i.e., $10,000 initially and $1,500 per annum thereafter) if it had to ensure that the Buyer’s Orders comply with law. While recognizing that commercial decisions in the private sector are not made on a collective basis with an eye toward maximizing societal efficiency — in part, a consequence of unfair trade practices and antitrust statutes — it is easy to imagine how individual negotiations between a DMS vendor and each dealer could lead to an efficient outcome as previously described. Risk allocation is effectuated through various provisions in a DMS master agreement. A DMS master agreement likely includes a provision by which the dealer acknowledges that conducting business in compliance with applicable law is the responsibility of the dealer, a responsibility that extends to the dealer’s use of the services and products derived from the licensed software, including Buyer’s Orders. Such a provision places the compliance-with-law risk of a Buyer’s Order squarely on the shoulders of the dealer. As a further liability shield for the DMS vendor, the master agreement likely includes provisions by which the vendor disclaims responsibility for lost profits, as well as exemplary; incidental; consequential and punitive damages and limits the dollar amount of direct damages for which the DMS vendor is liable. The cap on direct damages will likely be tied to the aggregate fees paid by the dealer to the vendor over a specified period — often 12 months. The cumulative effect of these provisions is to deny the dealer meaningful recourse against the DMS vendor if the Buyer’s Orders generated by the vendor’s software do not comply with law, resulting in lawsuits against or other losses to the dealer. The dealer is well advised to seek to shift to the DMS vendor or, at a minimum, mitigate these compliance-with-law risks. One way to do so directly is to insert in the master agreement a representation and warranty from the DMS vendor to the effect that the use of the DMS software, and the products generated by it, including Buyer’s Orders, comply with applicable law. Here, great care should be taken to ensure that “applicable law” is defined to include the laws of all states in which the Buyer’s Orders are intended for use. Further, the dealer should seek to negotiate a more liberal cap on direct damages, perhaps a multiple of what the DMS vendor proposed in the first instance. Additionally, the dealer should seek a carve-out from all limitation of damages provisions, in the event of third-party litigation alleging that the form of Buyer’s Order does not comply with the law. While a dealer may not want to incur the cost to have outside counsel perform an exhaustive compliance with law review of its Buyer’s Orders, the dealer is well advised to have counsel confirm that the Buyer’s Orders contain a waiver of class action litigation and multi-party arbitration of disputes, with all disputes to be resolved through arbitration between the dealer and the customer. If such alternate dispute resolution provisions are contained in the Buyer’s Orders and are enforceable under the law of the state in which the dealer operates, the dealer has protection against the specter of a class action lawsuit alleging that its form of Buyer’s Order does not comply with the law. It should be noted that while a review of applicable case and statutory law may not establish conclusively that class action litigation and multi-party arbitration waivers are enforceable, the review should uncover whether such provisions have been affirmatively disallowed by court ruling or legislation. See, e.g., Pace v. Hamilton Cove, 258 N.J. 82 (2024). In conclusion, dealerships should seek written assurances from their DMS vendors that their Buyer’s Orders comply with law and seek to mitigate the compliance-with-law risk, shifting it to the DMS vendor to the greatest possible extent. Natural Gas | Electricity Dedicated Support & Account Management Local Market Expertise & Insight Budget Certainty & Pricing Flexibility Tired of Unpredictable Utility Costs? Jay Thomson | 908.239.9644 jthomson@spragueenergy.com Rate Surprises Shouldn’t Cut Into Your Bottom Line Take Control of Your Energy Costs Today. 15 NEW JERSEY auto retailer
Preserving the Vehicle Trade‑in Tax Credit How NJ CAR Created a Coalition to Fight the Governor’s Terrible Idea by MAGDALENA PADILLA, ESQ., Senior Vice President of Government Affairs, NJ CAR We’ve all heard the adage that “politics makes strange bedfellows”, and Governor Murphy proved it when he introduced his proposed 2026 budget. In his proposal, the Governor included several sales tax proposals to increase State revenues, and numerous groups pushed back to oppose the increases. One proposed option to increase State revenue was to eliminate the trade-in credit for new car sales. Dealers, OEMs, electric vehicle (EV), and environmental advocates — not normally on the same side of many issues — banded together to oppose the elimination. Leading the charge, NJ CAR encouraged OEMs, EV, and environmental advocates to push back as a coalition. Though we held different perspectives, we shared the same opposition to the Governor’s proposal to eliminate the trade-in tax credit. NJ CAR dealers were troubled that, under this proposal, their customers would be discouraged from trading in their old cars and trucks. OEMs objected 16 NEW JERSEY auto retailer
that the proposal would dampen sales of new cars and trucks if the contract price of the new cars were not reduced by the trade-ins. EV and environmental advocates oppose policies that increase the number of gas-powered cars and trucks on New Jersey roads, but we all agreed that the Governor’s proposal to eliminate the vehicle trade-in tax credit would likely extend how long consumers stay with their old vehicles. We also agreed that the proposal would hit low- and moderate-income New Jerseyans the hardest. In New Jersey, consumers do not pay sales tax on the value of a trade-in. Instead, they get a sales tax credit from the value of their trade-in, which reduces the purchase price of a new vehicle. Simply put: Eliminating the trade-in tax credit would increase consumers’ cost of purchasing vehicles and threaten to tax consumers again if the Governor chose to tax consumers for the trade-in! Under NJ CAR’s guidance, the coalition of OEMs, EV, and environmental policy advocates strategized a plan of action. First, NJ CAR educated the group on how the tax credit benefits consumers so they could echo our opposition at their respective meetings with legislators and other groups. Second, NJ CAR leveraged our access to Trenton-based business associations that opposed other sales tax proposals but were eager to learn how our issue affected them as consumers. By educating them on how trade-ins work, they could spread our message as they lobbied against the proposed budget overall. Arming both groups with the facts, we explained that when a New Jersey consumer trades in a vehicle, a trade-in credit is applied to reduce the price of the new vehicle. To help illustrate this point, we provided examples of how the trade-in credit currently works in New Jersey and how it could work under the proposed changes. THE IMPACT OF THE TRADE-IN TAX CREDIT If the total vehicle purchase price is $50,000, and the value of the consumer’s trade-in is $25,000, under the current law, the consumer would pay the sales tax (6.625%) on $25,000 ($1,656.25), NOT on $50,000 ($3,312.50). Therefore, the purchase price would be $51,656.25 instead of $53,312.50. This is a sizable savings. If the trade-in credit were eliminated, the full purchase price on a $50,000 vehicle would be $53,312.50. NJ CAR further explained that the Governor’s budget packet lacked details regarding how his policy changes would be implemented. As a result, we knew the consumer would pay more under any plan. We feared that New Jersey wished to mirror California’s approach, where the trade-in tax credit would be removed entirely, and consumers would be taxed twice — once for buying a new vehicle, and again for trading in a used one. We also recognized that New Jersey could consider other options, such as eliminating the trade-in tax credit for luxury vehicles or for high-wage earners. Under all scenarios, the consumer would pay more. THE FIGHT TO KEEP THE TAX CREDIT NJ CAR convinced the OEMs, EV, and environmental advocacy organizations to formally unite in a signed coalition letter. Our letter highlighted how the coalition represented a broad spectrum of the private passenger vehicle market, including franchised new car and truck dealers, auto manufacturers, and the State’s EV and environmental advocates. The coalition letter was emailed to members and staffers of the Assembly and Senate Budget Committees, and coalition members distributed the letter to key contacts in the Legislature. The letter was also used to brief legislative leaders not on the Budget Committees. The intention was to impress upon the Legislature the weight of the historic coalition of dealers, OEMs, EV, and environmental advocates unified in opposition to a State budget policy, and urge them to join us in opposing it. After that, NJ CAR testified in opposition at the Budget Committees in the Assembly and Senate. Our message to decision-makers was that eliminating this tax credit was a bad policy that would negatively impact consumers by making New Jersey less affordable for working and middle-class families. We also submitted written testimony and hosted Zoom calls with legislative leaders of both Committees, encouraging them to oppose the Governor’s proposal. Tense negotiations were conducted between legislative leadership and Governor Murphy on his proposed revenue increases, and the Assembly was especially concerned about these proposed increases advancing the same year its members were up for re-election. Ultimately, the Governor’s Office withdrew the proposal to eliminate the vehicle trade-in tax credit. NJ CAR’s success in defeating Governor Murphy’s 2025 budget proposal was a collaborative effort, representing a rare opportunity for “strange bedfellows” to unify for a greater cause. 17 NEW JERSEY auto retailer
by RON E. BAUS, JR., 2025 Chairman, NJ CAR Let’s CELEBRATE Advancing Safety and Fair Pay On September 11th, Governor Murphy signed the “Motor Vehicle Open Recall Notice and Fair Compensation Act” (S3309/A4380). This new law, which goes into effect on April 1, 2026, is a big win for New Jersey dealers, their employees, and our consumers, but it wasn’t an easy process to get to the Governor’s desk. The law contains important consumer protections, such as enhanced outreach and notification to consumers who have an unresolved recall and statutorily confirms that customers are entitled to bring their vehicles to an authorized dealership for repair free of charge. Additionally, the legislation requires manufacturers to pay auto dealers fairly for warranty and recall repairs. Though this requirement seems sensible, we had to fight hard to ensure it stayed in the bill. The law now authorizes the use of a customized multiplier for each dealership by applying a process based on what the retail customer pays for the same service. Moreover, it codifies NJ CAR’s statutory standing to sue a manufacturer for an alleged violation of the New Jersey Franchise Practices Act (NJFPA). HOW DID WE GET HERE? This has been an ongoing issue for dealers in New Jersey. NJ CAR’s swift action in leading the fight has taken over two years, including countless meetings, calls, negotiations, and shoe-leather lobbying, but was ultimately successful because of all of you and our powerful grassroots lobbying. Dealers’ strong and influential voices are the best tool we have to advance our policy goals. You are major contributors to New Jersey’s economy, providing good-paying jobs that can’t be outsourced, all while investing in your employees to meet the requirements set forth by your manufacturer. So first, let me thank you for placing the calls, hosting the meetings, and sending the emails to help bring to light the challenges we faced as dealers related to this important piece of our business model by asking our legislators to pass this fundamental legislation. We must also thank the leaders and legislators in Trenton in both chambers who not only recognized the challenges we faced with this issue but also helped pass this legislation to ensure consumers as well as small business new car and truck dealers were always the focus. Speaker Craig J. Coughlin, Minority Leader John DiMaio, Senate President Nicholas Scutari, and Senate Republican Leader Anthony Bucco were tireless champions on this issue despite the aggressive opposition from the auto manufacturers. THE FINAL RESULT Twenty-six (26) Senators and forty-nine (49) Assemblymembers signed on as co-sponsors of this recall legislation. NJ CAR’s legislative staff, our external team of consultants, and the labor unions also played an important role with continual intelligence gathering, providing relentless education on the merits of the legislation. We testified at three (3) hearings in the Assembly and one (1) hearing in the Senate, exposing the growing concern that auto manufacturers continue to oppose this legislation challenging our efforts with objections throughout the process. The misinformation that was being circulated about this bill’s impact not only fueled our dealer body and NJ CAR’s legislative team to rebuke this information but also brought to light the challenges we faced in our industry, and our consumers faced as a result. To enhance our messaging to the public and influence decision-makers in Trenton, NJ CAR made a major investment in a public relations campaign. Using this method, we were able to demonstrate a positive, consumer-focused narrative by explaining the enhanced safety benefits the public would receive when the bill was passed. We also focused the messaging on our automotive technicians, illustrating the importance of positive fair compensation requirements for warranty and recall work. To help get this message out in a quick and effective way, we created digital video brochures to send to each legislative office, explaining why it was so critical to pass this bill. After an incredible victory, let’s take a few moments to celebrate the importance of this new legislation. The investment and effort NJ CAR made to get this across the finish line will have a positive impact on our members going forward, and none of it would have happened without your support! Speaker Craig J. Coughlin Senate President Nicholas Scutari Minority Leader John DiMaio Senate Republican Leader Anthony Bucco 18 NEW JERSEY auto retailer
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