Vol. 36 № 2 A Publication of the Illinois Automobile Dealers Association Automobile Dealer News A History of IADA Defending the Illinois Franchise Model Your IADA Directors humbly ask that you support these continued efforts by participating in our Association programs.
Memberships in: • AUTOCPA Group • The American Institute of Certified Public Accountants • The Illinois CPA Society CERTIFIED PUBLIC ACCOUNTANTS Located in Central Illinois, we serve the entire state. Contact us today to learn how we can help your dealership thrive. Drive Your Dealership Toward Financial Success We specialize in automobile dealers in the following areas: • Dealership valuations • Automobile dealer legal support • Buy-Sells for dealerships • LIFO inventory computations • Financial statement analysis • Corporation Income Tax returns • Personal Income Tax returns • CPA prepared financial statements • Dealer estate planning • Employee theft consulting • Internal control studies and audits • Profit consulting • Training office managers/CFO’s • 401K Audits Serving more than 250 Automobile Dealers throughout the United States (309) 662-8797 Email: woodwardassoc@cpaauto.com Website: www.cpaauto.com 1707 Clearwater Avenue P.O. Box 1584 ·Bloomington, IL 61702
CONCENTRATIONS Dealership Mergers & Acquisitions Dealership Franchise Law Business Litigation/Motor Vehicle Review Board Disputes Manufacturer/Franchisor Relations Business & Commercial Law Advertising Compliance Review Consumer Complaints Dealership Succession Add Points Real Estate Law Employment & Labor Law Federal & State Regulatory Compliance BACKGROUND Principal, Private Law Firm Former, IADA Legal Counsel Former, Illinois Assistant Attorney General, Deputy Chief, Consumer Protection Division Drafted Illinois Motor Vehicle Franchise Act Amendments Creating Motor Vehicle Review Board Drafted Illinois Motor Vehicle Advertising Regulations Julie A. Cardosi, Esq. 3040 Spring Mill Drive, Suite B Springfield, IL 62704 (217) 787-9782 jcardosi@autocounsel.com www.autocounsel.com Exclusive. Strategic. Results. Exclusively representing the unique business interests of automobile dealers for over 35 years.
CONTENTS Vol. 36 No. 2 Chairman Jamie Auffenberg/(618) 624-2277 St. Clair Auto Mall Auffenberg Auto Mall 1130 Auffenberg Ave., Shiloh, IL 62269 Vice Chairman Rick Curia/(815) 288-4455 Ken Nelson Auto Group 1100 N. Galena Ave., Dixon, IL 61021 Secretary/Treasurer Ryan Gremore/(309) 664-1222 O’Brien Auto Group 1601 Fort Jesse Rd., Normal, IL 61761 Executive Director Joe McMahon/(217) 753-0220 Illinois Automobile Dealers Association 300 W. Edwards St., Springfield, IL 62704 2025 OFFICERS ©2025 The Illinois Automobile Dealers Association (IADA) | The newsLINK Group LLC. All rights reserved. Illinois Automobile Dealer News is published four times per year by The newsLINK Group LLC for IADA 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 IADA, 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. Illinois Automobile Dealer News is a collective work, and as such, some articles are submitted by authors who are independent of IADA. 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. Illinois Automobile Dealers Association 300 W. Edwards St. Springfield, IL 62704 T (217) 753-0220/F (217) 753-3424 IllinoisDealers.com Scan here to check out our interactive website at illinoisdealers.com! 6 A MESSAGE FROM THE IADA CHAIRMAN AND BOARD OF DIRECTORS A Call to Action 8 IADA History Motor Vehicle Franchise Act 10 Enactment of the Motor Vehicle Franchise Act — 1979 12 Timeline 20 Direct Sales, Overreaching Factory Programs and Spin-Off “Dealerships” 21 IADA COUNSELOR’S CORNER Dealership Advertising in Illinois Origins, Enforcement and Benefits to Dealers From the Illinois Motor Vehicle Advertising Regulations 6 8 4 Illinois Automobile Dealer News
Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® Bradley Bartsch, bradley.w.bartsch@bofa.com business.bofa.com/dealer ©2024 Bank of America Corporation. All rights reserved. DFS-699-AD 6942528 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA. Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® Bradley Bartsch, bradley.w.bartsch@bofa.com business.bofa.com/dealer ©2024 Bank of America Corporation. All rights reserved. DFS-699-AD 6942528 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.
On behalf of the entire IADA Board of Directors, we are reaching out with an important message and a sincere ask for your partnership. Doing business in Illinois has never been more challenging. The cost of operating here continues to rise — and so does the cost of protecting our interests in Springfield. That’s why your support of our Association programs like IADA-CVR, Ethos and others is more critical than ever. Please take a moment to read this issue of our magazine. Inside, you’ll find a deeper look at the powerful work IADA is doing to protect and strengthen the Illinois dealership model — a model that benefits all our dealerships. We’re asking you to take advantage of an easy and outstanding opportunity to partner through the Illinois Automobile Dealers Association to protect the Illinois dealership model. WHY YOUR SUPPORT MATTERS Your partnership in programs like IADA-CVR and Ethos is a vital funding source that enables IADA to advocate for you — both legislatively and legally — in defense of the Illinois dealership franchise system. The entire staff of the IADA team is either advocating at the Capitol or servicing our dealerships and customers with the CVR process — or both. If you’re already participating in the CVR program, thank you. You are supporting the fight to preserve our dealership industry. If you’re not yet involved, we need you with us. To join us, please reach out to the Association office at (217) 753-0220. They’re here to help answer your questions and walk you through the sign-up process. Membership dues account for less than 5% of IADA’s total budget. Without IADA programs like CVR and Ethos, we simply couldn’t do what we do. And without IADA, it would be the state — not us — shaping the future of our industry. We can’t let that happen. A MESSAGE FROM THE IADA CHAIRMAN AND BOARD OF DIRECTORS A Call to Action Jamie Auffenberg IADA Chairman 6 Illinois Automobile Dealer News
WHAT IADA HAS ACCOMPLISHED — WITH YOUR SUPPORT Thanks to your partnership, we’ve: • Increased the doc fee to $367, putting millions of dollars back into dealerships — and we’re pushing to raise it another $100 this spring. • Worked to strengthen the Illinois Franchise Act to prevent manufacturers like Volkswagen and Honda from bypassing dealers with spin-off brands or direct sales models. • Passed legislation to allow dealers to collect retail rates for warranty work — a critical win for our service departments. • Invested over $1 million to defeat Ford’s “Model e” plan, which threatened to eliminate the dealer’s role in the sales process. These are just a few examples of how IADA’s efforts have allowed us to keep more money in our dealerships. Any one of these issues has allowed us to reinvest millions of dollars back into our businesses to better serve our customers and communities. But the challenges facing us with manufacturers trying to circumvent the Illinois dealership model are great. Support us the easy way by partnering with us through the Association CVR partnership and other IADA programs. Thank you for your time, your trust and your continued commitment to our shared success. Sincerely, Jamie Auffenberg, Chairman, Auffenberg Auto Mall — Shiloh Rick Curia, Vice Chairman, Ken Nelson Auto Group — Dixon Ryan Gremore, Secretary/Treasurer, O’Brien Auto Team — Normal 7 Illinois Automobile Dealer News
IADA History Motor Vehicle Franchise Act 8 Illinois Automobile Dealer News
For over 105 years, IADA has been dedicated to serving dealers across Illinois. A major milestone in fostering a fair, competitive and profitable motor vehicle retail network was the creation of the Illinois Motor Vehicle Franchise Act in 1979. IADA played the key role in the Act’s development and has continually worked over the past 45 years to strengthen and update it in step with the evolving automotive industry. The Act protects dealers from unfair termination, one-sided dealership sales and service agreement changes that would reduce them to delivery agents, and unreasonable interference with succession plans, among other safeguards. IADA is fighting to prevent OEMs from establishing direct-to-consumer sales networks that compete with their franchised dealers. Senate Bill 1939 would prohibit manufacturers from creating spin-off entities to bypass established dealer networks that have contributed to their success. IADA has spent decades enhancing the Illinois Motor Vehicle Franchise Act to support and protect dealers across the state. Yet, many remain unaware of the Act’s significant role in safeguarding their businesses and fostering a thriving retail automotive industry. The following is a brief summary of the Motor Vehicle Franchise Act legislation that IADA has championed over the past 45 years to strengthen dealer rights. As legacy manufacturers increasingly attempt to emulate start-ups by pursuing factory-direct sales models, the fight to preserve the franchise system and uphold the protections afforded by the Act is more critical than ever. 9 Illinois Automobile Dealer News
The Illinois Motor Vehicle Franchise Act was signed into law as Public Act 81-43, effective June 29, 1979 (introduced as Senate Bill 1002). The Act was created to address the power imbalance between automobile manufacturers and their franchised dealers and to empower dealers. As Sen. Berman, the Senate sponsor of Senate Bill 1002, said during the debate on the Senate floor: “The purpose of Senate Bill 1002 is to attempt to strike a fairer balance between the interests of the manufacturers of automobiles and their dealers that operate in all of our districts. At the present time, automobile dealers are, to a great extent, captives of the whims of the manufacturers. This bill attempts to strike a better bargaining position as to the exercise of their franchise rights with the dealers. This bill prohibits forcing dealers to take unordered cars or parts, prohibits manufacturers from canceling or failing to renew a franchise without good cause and without notice, and a number of other items …” During the same Senate debate, Sen. Johns said: “We built in our family a quarter-million-dollar dealership, brand new, worked hard to develop it. They built another dealership about six miles away. They forced us to take cars that we didn’t want. They forced us to take trucks that we ordered with different axle ratios, etc. They did everything to us that they could. Finally, we got out of the business.” Motor vehicle manufacturers still have tremendous leverage over their dealers, but the creation of the Act gave dealers a slingshot to fight back against unreasonable manufacturer demands. Before the Act, a manufacturer could force a dealer to invest in expensive dealership facilities and inventory and then turn around and authorize a new dealership in the existing dealership’s backyard. Now, a manufacturer cannot put a new dealership in the relevant market area of an existing dealer of the same line make without a showing of good cause to add a new dealership. The regulation of new points and the relocation of existing points is just one example of how the Act protects dealers from overreach by a heavy-handed manufacturer. The Act also prohibits arbitrary and unreasonable conduct, prohibits cancellation or nonrenewal of a sales and service agreement without good cause, prohibits unreasonable facility requirements and a host of other items. Enactment of the Motor Vehicle Franchise Act — 1979 10 Illinois Automobile Dealer News
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Timeline 1990 LEGISLATIVE SESSION HB 776 • Agreement reached with General Motors to put a moratorium on the Delco-Tech Service Center Program. 1992 LEGISLATIVE SESSION HB 3246 • Allows a dealer to relocate within two miles of its existing location without protest. • Limits warranty audits and chargebacks to 18 months. • Provides that all warranty claims must be approved or disapproved by the manufacturer within 30 days. Provides that if a manufacturer does not act on a claim within the 30-day period, the claim is automatically approved. SB 393 • Prevents dealers and rental agencies from going outside of their relevant market areas to conduct off-site sales. • Requires that all vehicle sales made as a result of vehicle referral programs to be consummated only by a licensed dealer. SB 1273 • Prohibits a manufacturer (Ford) from establishing separate facilities to sell program vehicles. • Allows dealers to charge a $40 Doc Fee, with annual increases based on the Consumer Price Index. 1993 LEGISLATIVE SESSION HB 1587 • Prohibits out-of-state dealers from selling from Illinois locations. 1994 LEGISLATIVE SESSION HB 3522 • Requires mandatory damage disclosure for new vehicles when the damage exceeds 6% of the MSRP to protect against frivolous lawsuits for non-disclosure. SB 1730 • Prohibits out-of-state dealers from displaying or selling vehicles in Illinois. 12 Illinois Automobile Dealer News
13 Illinois Automobile Dealer News
1995 — FIELDS AND THE CREATION OF THE ILLINOIS MOTOR VEHICLE REVIEW BOARD One of the most important features of the Act is the formation of the Illinois Motor Vehicle Review Board in 1995. The Board is a quasi-judicial administrative Board comprised of seven members appointed by the Secretary of State to represent the public interest at large who have not engaged in the sale, manufacture, or distribution of vehicles at retail. The Board’s sole function is to resolve disputes arising under the Motor Vehicle Franchise Act. Although most protests that are filed with the Board are settled before they reach the Board, some protests proceed through the entire (quasi) judicial process of discovery, testimony and oral argument before the SOS’ independent hearing officer. At the conclusion of those proceedings, the hearing offer will submit a proposed decision to the Board for the Board to adopt, reject, or modify. Since 1995, the Board has heard over 350 protests. Prior to 1995, Motor Vehicle Franchise Act disputes were heard in Illinois Circuit Court. The only way to stop a violation of the Act was by making a slow and costly slog through court, making it difficult for violations to be readdressed. The 1994 Fields Jeep-Eagle v. Chrysler Corp. litigation involved several consolidated lawsuits to resolve dealer challenges to motor vehicle dealership relocations. In Fields, the Illinois Supreme Court held that the Act, as it was structured at the time, violated the separation of powers doctrine under the Illinois Constitution by delegating nonjudicial functions to the courts. The court held that the duty to investigate and weigh statutory and non-statutory factors for determining whether there is good cause to establish or relocate motor vehicle dealerships and whether the establishment or relocation of a dealership is in the public interest and welfare were functions for a legislative or administrative body. The Fields decision created a blueprint for the formation of the Motor Vehicle Review Board. 1995 — SB 539 • Senate Bill 539 (Public Act 89-145, effective July 14, 1995) significantly modernized the Illinois Motor Vehicle Franchise Act by establishing the Illinois Motor Vehicle Review Board. Public Act 89-145 also clarified definitions and outlined specific procedures for hearings on franchise disputes. 14 Illinois Automobile Dealer News
We invite you to join us today. Contact us at ElectrifyIL@Ameren.com to get started. Learn more about our ChargeSmart program at AmerenIllinois.com/ChargeSmart. Engage. Learn. Share. 1. Engage: Join our webinars and boost your EV sales expertise 2. Learn: You and your customers can use our EV calculator to compare gas versus kWh cost savings and more 3. Share: Our ChargeSmart Program can help Ameren customers earn a bill credit and charge for less— sign up is FREE Dealer Partner Network Benefits: • We help you get noticed by listing you on our AmerenIllinois.com/EV web pages • As a Dealer Partner, you get access to a special portal offering resources to help you educate EV customers. Enrollees earn a bill credit and charge for less costs— sign up is FREE An Exclusive Offer to Dealers Join our network of Auto Dealers and let’s transform the EV journey for customers together. The Ameren Illinois Dealer Partner Network is FREE to join and provides resources to help ease the minds of potential EV drivers. 1999 LEGISLATIVE SESSION HB 520 • Requires manufacturers to reimburse dealers for warranty parts at the retail rate. • Permits the Motor Vehicle Review Board to award expert witness fees in successful dealer protests. • Allows dealers to obtain methodology for distribution of new vehicle inventory from manufacturers. • Prohibits manufacturers from making unreasonable construction, remodeling or renovation of dealership facilities as a condition of receiving motor vehicle inventory or if not warranted by economic conditions. HB 555 • Prohibits manufacturers from owning or operating dealerships. 2000 LEGISLATIVE SESSION HB 3037 • Illinois Motor Vehicle Franchise Act changes to strengthen existing statutes regarding dealership relocations. HB 3420 • Electronic title and lien processing. 2001 LEGISLATIVE SESSION HB 2960 • Expands the Illinois Motor Vehicle Review Board from a three-member panel to a full seven-member Board. The Board has benefited dealers by streamlining the dispute resolution process. 15 Illinois Automobile Dealer News
2007 LEGISLATIVE SESSION HB 1657 • Beginning Jan. 1, 2008, IADA was successful in raising the base Doc Fee level to $150 per vehicle ($100 increase). Retained annual CPI increases. 2009 LEGISLATIVE SESSION SB 1417 • Adds Right of First Refusal protections for dealerships. • Provides language to allow dualling of unrelated franchises at one location. • Adds termination safeguards. • Expands the definition of “motor vehicle” to include heavy-duty truck engines, transmissions and rear axles. • Defines dealer audit periods for incentive audits and warranty audits at 12 months. HB 4628 • Provides that a manufacturer that used the bankruptcy process to terminate a dealer cannot reopen the location without first offering the point to the terminated dealer unless (i) as a result of a former franchisee’s cancellation, termination, non-continuance, or nonrenewal of the franchise, the bankrupted manufacturer had consolidated the line make with another of its line makes with a franchisee who operates a facility located within that relevant market area; (ii) the successor manufacturer paid the former franchisee the fair market value of the former franchisee’s franchise; or (iii) the successor manufacturer proves that the former franchisee is unfit to own or manage the dealership. • Prohibits manufacturers from compelling dealers to enter into Site-Control Agreement, which could limit dealers’ autonomy over their real property. 16 Illinois Automobile Dealer News
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2010 NISSAN CASE Warranty surcharges, but no uniform agreement. IADA LDF participated. 2017 LEGISLATIVE SESSION SB 1687 • Limits the ability of a manufacturer to penalize a dealer if a customer resells or exports a vehicle. • Prohibits a manufacturer from requiring dealer improvements more than once every 10 years unless the manufacturer pays for the improvements. • Prohibits a manufacturer from requiring that dealers use specific vendors for improvements unless the manufacturer pays for the increased expense of its vendor over the dealer’s. • Requires manufacturers to reimburse proposed buyers and sellers if the manufacturer exercises a right of first refusal to block a dealership transfer. • Includes a legislative finding that the regulation of motor vehicle manufacturers creates a system for servicing vehicles and complying with warranties. 2019 LEGISLATIVE SESSION SB 690 • Beginning Jan. 1, 2020, IADA was successful in raising the base Doc Fee to $300 per vehicle ($150 increase). Retained annual CPI increase. 18 Illinois Automobile Dealer News
2021 LEGISLATIVE SESSION HB 3940 • Requires vehicle manufacturers to compensate franchised dealers fairly and adequately for warranty work on vehicles. • Adjusts manufacturer calculations for time allowances, labor rates and parts prices for warranty work. • Extends warranty reimbursement provisions to recall repairs. • Ensures that vehicle technicians at Illinois’ dealerships earn equal pay for equal work. It generated a positive economic impact in Illinois. HB 2435 • Prohibits a manufacturer from prohibiting or requiring a dealer to offer a specific secondary product, including service contracts, maintenance agreements, extended warranties, protection product guarantees, gap waivers, insurance, replacement parts, vehicle accessories, oil or supplies. • Permits a manufacturer to offer an incentive program to encourage dealers to offer manufacturer-approved or endorsed secondary products. • Prevents manufacturers from dictating to dealers to use only their products and extended service contracts. 2023: MERCEDES-BENZ V. JP MOTORS REAFFIRMS IMPORTANCE OF MOTOR VEHICLE REVIEW BOARD A 2023 federal district court decision, Mercedes-Benz USA LLC. V. JP Motors Inc., 2023 U.S. Dist. Lexis 211132, reinforced the importance of the Motor Vehicle Review Board as the proper venue to resolve disputes arising under the Act. In JP Motors, a dealer who owned a combined Mercedes-Benz, Chevrolet and Nissan dealership notified each of his OEMs of his intent to sell the dealership. Chevrolet and Nissan approved the sale, but Mercedes-Benz exercised a right of first refusal to block the sale. Mercedes insisted on an apportionment of the selling price that could be attributed to the Mercedes-Benz franchise before deciding whether to approve the sale. After JP Motors responded to Mercedes-Benz that the Act did not entitle Mercedes-Benz to an apportionment, Mercedes-Benz filed suit in federal court alleging that JP’s refusal to provide the apportionment violated the Mercedes-Benz dealer agreement. The federal judge in JP Motors dismissed Mercedes-Benz’s lawsuit, holding that the federal court must abstain from deciding a matter that should properly be heard by the Motor Vehicle Review Board. The judge stated that the state had a significantly greater interest in regulating the sale and distribution of motor vehicles, which “vitally affect the general economy of the State and the public interest, welfare and safety” of Illinoisans. The case was dismissed from federal court and remanded to the Motor Vehicle Review Board. The Board denied Mercedes-Benz’s right of first refusal request and the parties were then able to complete the buy/sell agreement. 19 Illinois Automobile Dealer News
Direct Sales, Overreaching Factory Programs and Spin-Off “Dealerships” Recently, IADA was involved in a pair of legal actions in which important dealer rights under the Illinois Motor Vehicle Franchise Act were being challenged. IADA supported a group of 29 Ford dealers who filed a protest in December 2022, challenging Ford’s “Model e” electric vehicle allocation program. Ford’s Model e Program would have interfered with price negotiation, trade-in valuations and vehicle allocation. The successful Board protest preserved Ford dealers’ (and all dealers’) right to continue operating as independent dealers. In November 2023, the Motor Vehicle Review Board held that the Ford Model e program violated the Act, which was a huge victory for the entire dealer body in Illinois as well as the rest of the county. The Illinois Motor Vehicle Review Board decision was a catalyst for Ford to discontinue the program nationwide. IADA was also heavily involved in litigation to challenge the direct sale of motor vehicles by certain manufacturers. In March of 2021, IADA, along with the Peoria Metro New Car Dealers Association, the Illinois Motorcycle Dealers Association, CATA and over 300 dealers sued motor vehicle manufacturers Rivian Automotive and Lucid Motors to challenge the issuance of dealer’s licenses to those manufacturers to sell directly to the public. Unfortunately, after litigating the direct sale issue all the way to the Illinois Supreme Court, the dealer challenge to direct sales was dismissed. Currently, IADA is trying to stop the spread of direct sales to additional manufacturers. IADA-promoted legislation, Senate Bill 1939, would prevent legacy manufacturers from using affiliates or spinning off new companies to sell directly to the public in competition with their dealer networks. As motor vehicle recalls continue at an astounding pace, a franchised dealer network advocating for customers is the best assurance that recalled vehicles are repaired as soon as possible. Direct sales by vertically integrated manufacturers also lead to higher vehicle and service costs for consumers. For more than a century, IADA has proudly stood as a strong advocate for Illinois dealers, and that success has only been possible because of unwavering grassroots support from you, our valued members. Thank you for being the driving force behind our efforts. We ask for your continued support of all our vital IADA partnerships with CVR and programs like Ethos, Champ Titles and others highlighted on www.illinoisdealers.com. Together, we can keep championing the interests of Illinois dealers for years to come. 20 Illinois Automobile Dealer News
IADA COUNSELOR’S CORNER Dealership Advertising in Illinois Origins, Enforcement and Benefits to Dealers From the Illinois Motor Vehicle Advertising Regulations Having had a front row seat in the drafting and promulgation of the Illinois Motor Vehicle Advertising Regulations (“Regulations”)1, I can attest that the Regulations were intended and established to ensure transparency and fairness in automotive advertising. The Illinois automotive dealer industry has embraced these new legal standards. Indeed, the automotive industry in Illinois eagerly welcomed and had significant input in the adoption process through the involvement and advocacy of dealers and their representative automotive trade groups, chiefly among them, IADA. The Motor Vehicle Advertising Regulations were first adopted on Dec. 3, 1991, by the Illinois General Assembly’s Joint Committee on Administrative Rules.2 The Regulations were implemented under the Illinois Consumer Fraud and Deceptive Business Practices Act3 which seeks to protect consumers from unfair and deceptive business practices, including without limitation, misleading advertisements. The Illinois Attorney General’s office is responsible for enforcing the Regulations,4 ensuring that dealerships and advertisers comply with the law. Julie Cardosi, Esq. Law Office of Julie A. Cardosi, P.C. The Regulations cover various aspects of motor vehicle advertising, which includes but is not limited to the following: • Clear and Conspicuous Disclosures: Advertisements must present all material terms in a way that is easily understandable and not misleading.5 • Price Advertising: Dealers must accurately represent the total advertised price6 of their advertised vehicles, including any limitations or conditions. • Credit and Lease Advertising:7 Advertised vehicle financing rates and terms, as well as vehicle lease terms, must be truthful and comply with state and federal laws. • Manufacturer Rebates and Trade-ins:8 Promotions involving trade-ins or manufacturer rebates must be clearly defined and not deceptive with specific disclosures and applicable requirements. The Motor Vehicle Advertising Regulations provide several advantages to both the automotive industry and dealers in Illinois: • Consumer Trust: Transparent advertising fosters trust between dealerships and customers which facilitates stronger customer relationships and repeat business for dealers. • Legal Protection: Compliance with the Motor Vehicle Advertising Regulations helps dealerships avoid legal disputes with state and federal regulators (such as the Illinois Attorney General’s Office and the Federal Trade Commission) and potential fines and civil penalties; as well as 21 Illinois Automobile Dealer News
disputes and private litigation brought by customers which can lead to monetary damage awards, attorneys fees and other pecuniary costs to the dealership, beyond negatively impacting the dealership’s goodwill business relationships with its customers. • Market Fairness: Legally promulgated and standardized advertising practices under the law create a level playing field within the industry and prevent unethical competition. • Enhanced Business Reputation: Dealers who adhere to the legal requirements of the Motor Vehicle Advertising Regulations build positive relationships with their customers and their vendors and suppliers, as well as within their local communities. The Motor Vehicle Advertising Regulations are time-tested. That is, over the years, since their original adoption in 1991, even with the advent of the internet and the precipitous decline of print media, the Regulations have undergone very few, minor amendments, which have included updates in 2001 to certain disclosures, and in 2003 to refine certain limitations, price transparency and address lease advertising exemptions. YOU WANT IT! (801) 676-9722 SALES@THENEWSLINKGROUP.COM DON’T ROLL THE DICE ADVERTISE HERE! CONTACT US TODAY By maintaining ethical advertising standards, the Motor Vehicle Advertising Regulations ensure that Illinois dealerships and their customers both benefit from a fair and competitive automotive retail market. Julie A. Cardosi is Principal of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois, and has been practicing law for nearly 40 years, and has exclusively represented the unique business interests of automobile dealers state-wide for over 30 years. Formerly in-house staff legal counsel for the Illinois Automobile Dealers Association, she concentrates her practice in the areas of dealership ownership transfers (asset purchases and stock acquisitions), mergers and acquisitions, franchise law and franchise issues, factory relations, add points, commercial real estate transfers, advertising, and other issues impacting day-to-day dealership operations. Julie also previously served as an Assistance Attorney General and Deputy Chief of the Illinois Attorney General’s Consumer Fraud Division and is the original author of the Illinois Motor Vehicle Advertising Guidelines from with the Illinois General Assembly adopted the Motor Vehicle Advertising Regulations. 1. 14 Ill. Admin. Code Part 475. 2. See https://www.ilga.gov/Commission/jcar/admincode/ JCARTitlePart.asp?Title=014&Part=0475 3. 815 ILCS 505/1 et seq. 4. 815 ILCS 505/2, 3, 4, 7. 5. 14 Ill. Admin. Code §475/210. 6. 14 Ill. Admin. Code §475/310. 7. 14 Ill. Admin. Code §§475/610, 710. 8. 14 Ill. Admin. Code §§475/530, 540 22 Illinois Automobile Dealer News
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Illinois Automobile Dealers Association 300 W. Edwards St. Springfield, Illinois 62704 This magazine is designed and published by The newsLINK Group LLC | (855) 747-4003 BROWN & BROWN Overview Brown & Brown Dealer Services (BBDS) is an F&I performance company aimed at helping to build tailored solutions for today’s vehicle retailer. The complexities inherent to the F&I business demand a white glove approach with the flexibility to satisfy a variety of brands or markets. The BBDS network of providers helps ensure the proper F&I program is developed and executed to help maximize upfront sales and profits, provide a top-tier customer ownership experience and create wealth-building opportunities downstream. How We Can Help Our BBDS team is comprised of experienced and knowledgeable F&I specialists that have worked with dealers for decades. They are equipped with access to the industry’s top product providers, a top-rated training and development program and commercial insurance products to help you find solutions to fit your business needs. F&I Products • Flexibility to help fit your needs • Access to A-rated providers • Two in-house administration companies • Wealth-building opportunities on products Training Solutions • F&I Management Certification School • Learning Management Systems (LMS) delivering online training • Monthly webinars and video training archive • Ethics & Compliance Certification Participation Programs • Program selection based on your goals and objectives. NCFC, CFC, Retro or DOWC • Nationally recognized team that specializes in evaluating and configuring personalized solutions • No obligation evaluation of your current program Property & Casualty • More markets for your risks mean more choices to help meet your individual business and personal needs • Knowledgeable professionals to help identify your unique risks and find solutions to help protect your assets Employee Benefits • • Health Collective Purchasing Arrangement that includes a dedicated service representative to help you with premium savings, national and regional coverage and to DEALER SERVICES The Broker for the Dealer Custom F&I Programs That Help Deliver Results and Profits Brown & Brown Dealer Services 263 Shuman Blvd. • Naperville, IL 60653 | bbrown.com | (847) 612-9361
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