2026 ISSUE 1 | GLANCDA.ORG OFFICIAL PUBLICATION OF THE GREATER LOS ANGELES NEW CAR DEALERS ASSOCIATION GLANCDA 2026 Member Luncheon & Annual Meeting March 24, 2026 — Sheraton Universal Hotel
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©2026 The Greater Los Angeles New Car Dealers Association (GLANCDA) | MBR Connect, formerly The newsLINK Group LLC. All rights reserved. Los Angeles Dealer is published three 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 GLANCDA, 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. Los Angeles Dealer is a collective work, and as such, some articles are submitted by authors who are independent of GLANCDA. 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. We are GLANCDA. GLANCDA BOARD OF DIRECTORS PRESIDENT Jeanne Brewer Acura of Glendale VICE PRESIDENT Evan Ellis Alfa Romeo and Fiat of Glendale SECRETARY/TREASURER Peter Smith Bob Smith Toyota IMMEDIATE PAST PRESIDENT Howard Tenenbaum Porsche Woodland Hills GLANCDA DIRECTORS Howard Tenenbaum Peter Browning John Davis Rinaldi Halim Robb Hernandez Brad Mugg Tim Smith Ian Thomas 700 N. Central Ave., Ste. 320 Glendale, CA 91203 (213) 748-0243 | fax (213) 748-0245 Originally founded in 1907, the Greater Los Angeles New Car Dealers Association provides valuable educational and philanthropic benefits to the Los Angeles Community. The association believes that involvement with local charitable organizations makes a positive difference for everyone involved. 4 PRESIDENT’S MESSAGE Engaging on All Fronts By Jeanne Brewer, President, GLANCDA 6 GLANCDA Board of Directors and Staff 8 GLANCDA 2026 Member Luncheon & Annual Meeting March 24, 2026 — Sheraton Universal Hotel 13 ASK ALISON Has Your Dealership Considered a Medical Captive? By Alison McCallum, EPIC Insurance Brokers and Consultants 14 California’s Premier Dealerships Regain Momentum Post‑CARB Clarity By Jayson Crouch, Managing Director, Haig Partners LLC 16 Disparate Treatment by Manufacturers in Warranty Parts & Labor Rate Increase Evaluations A Multi-Case Review By Joe Jankowski, Managing Member, Armatus Dealer Uplift 18 MANNING LEAVER LEGAL LANE Navigating the Fast Lane Understanding California’s Advertising Laws By Wade Kackstetter, Esq., Partner, Manning, Leaver, Bruder & Berberich LLP 23 Workers’ Compensation, Experience-Modifier, and How Litigation Is Adding to Your Claims By Sam Celly, MS, JD, CSP, President and CEO, Celly Services Inc. 26 California’s CARS Act Makes First Communication Compliance Critical By Mark Sanborn, Senior Product and Regulatory Counsel, ComplyAuto 28 The Top 20 Trends in U.S. Auto Distribution for 2026 By Scali Rasmussen 3
PRESIDENT’S MESSAGE Engaging on All Fronts Jeanne Brewer, President, GLANCDA As we move into the heart of 2026, I want to take a moment to connect with all members and valued allied industry partners of the Greater Los Angeles New Car Dealers Association. We’ve had a busy spring, and there’s plenty more on the horizon. Political Engagement This is an important election season, with the June 2 primary fast approaching. Key races at the city, county, state and federal levels will directly impact our industry. GLANCDA continues to meet with candidates and incumbents to communicate the collective interests, needs, and concerns of Los Angeles County dealers and identify those who align with our priorities. Your participation matters, and we encourage our members to make every effort to vote. It is more crucial than ever. Advocacy remains central to our mission. On April 7, Los Angeles-area dealers joined colleagues from across the state in Sacramento for more than 25 meetings with Assemblymembers and Senators. We encouraged our lawmakers to continue incentives for zero-emission vehicles to help maintain affordability as federal programs sunset. We also highlighted the shortage of skilled automotive technicians in our industry and the need to fund training programs to address this challenge. Workforce Development While engaging with our California legislators is critical, we’re also working proactively to address these challenges. In line with our ongoing workforce development efforts, GLANCDA will host the 2026 High School Auto Tech Competition at Rio Hondo College on Saturday, May 26. Fourteen schools are expected to participate in the event, now in its third decade. When dealers and industry professionals engage directly with students and encourage their interest in careers in automotive technology, those experiences leave lasting impressions. We encourage you to get involved in Career Days, competitions, and other workforce development initiatives as we strengthen the pipeline of skilled technicians in the Greater Los Angeles area. Member Events On March 18, we hosted our annual member luncheon at the Universal Sheraton, featuring Dave Roberts of the Los Angeles Dodgers, who shared insights on leadership and building a championship culture. We also recognized Tim Smith of Bob Smith BMW as the recipient of the 2026 Lifetime Service Award. We wish Tim, who will retire from the board at the end of the year after more than 40 years of dedicated service, all the best as he begins his next chapter. Looking ahead, we encourage all members to join us for our Dealer Appreciation and Recruitment Dinner on June 25 at 555 East American Steakhouse in Long Beach. These gatherings offer a relaxed setting to connect with colleagues and engage with GLANCDA leaders. Thank you for your continued engagement and all you do for our industry. Jeanne Brewer President, GLANCDA 4
GLANCDA Board of Directors and Staff BOARD OF DIRECTORS JEANNE BREWER President Acura of Glendale EVAN ELLIS Vice President Alfa Romeo and Fiat of Glendale PETER SMITH Secretary-Treasurer Bob Smith Toyota RINALDI HALIM Director Sierra Chrysler Dodge Jeep Ram ROBB HERNANDEZ Director Camino Real Chevrolet BRAD MUGG Director Honda of Downtown Los Angeles TIM SMITH Director Bob Smith BMW Mini IAN THOMAS Director Thomas Acura TIM HUTCHERSON Director Downey Nissan STAFF BOB SMITH Executive Director Greater Los Angeles New Car Dealers Association JOE BERBERICH Legal Counsel Manning, Leaver, Bruder & Berberich HOWARD TENENBAUM Immediate Past President Porsche Woodland Hills PETER BROWNING Director Browning Automotive Group JOHN DAVIS Director Glenn E Thomas Chrysler Dodge Jeep Ram 6
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?® 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?® 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.
GLANCDA 2026 Member Luncheon & Annual Meeting March 24, 2026 Sheraton Universal Hotel 8
On March 24, the Greater Los Angeles New Car Dealers Association (GLANCDA) welcomed more than 250 dealer members and industry partners to the Sheraton Universal Hotel for its highly anticipated Member Luncheon and Annual Meeting — an event that blended celebration, strategic vision and inspiring conversation. Jeanne Brewer, 2026 GLANCDA president, served as master of ceremonies for the program, infusing the event with warmth and momentum. A Major League Conversation: Dave Roberts Takes the Stage The program’s headline moment featured a lively and insightful discussion with Dave Roberts, manager of the Los Angeles Dodgers, moderated by longtime MLB broadcaster José Mota. The conversation offered attendees an exclusive behind the scenes glimpse into one of the most storied franchises in professional sports. Roberts reflected on the Dodgers’ back-to-back World Series championships and the approaching season, speaking candidly about the mindset and preparation that fuel excellence across a grueling MLB schedule. He also shared his outlook as the team eyes an ambitious goal: a third consecutive World Series title. The audience was treated to personal stories and observations about key players, including Shohei Ohtani, Freddie Freeman and Mookie Betts, highlighting their work ethic, leadership styles and contributions on and off the field. The session was an energizing reminder of the power of discipline, collaboration and resilience — values shared by leaders across the automotive industry. Honoring a Legacy: Tim Smith Receives Lifetime Service Award Another highlight of the program was the presentation of the GLANCDA Lifetime Service Award to Tim Smith of Bob Smith BMW, in recognition of nearly 50 years of service on the association’s board. A moving tribute video featuring colleagues, family 9
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and friends underscored Smith’s profound contributions to GLANCDA and the broader dealer community. Past honoree, Mike Sullivan, attended the event in person to present the award, offering heartfelt remarks that celebrated Smith’s leadership, mentorship and unwavering commitment to strengthening the association. Smith now joins an esteemed circle of past recipients, including Fritz Hitchcock, Bert Boeckmann and David Ellis. Looking Ahead: Association Priorities and Events GLANCDA leaders highlighted the association’s strategic priorities for the year ahead, emphasizing two critical goals: • Driving increased dealer engagement • Encouraging dealers to lend their voices to important advocacy efforts These priorities reinforce GLANCDA’s commitment to ensuring that Los Angeles-area dealers remain informed, united and influential during a period of rapid automotive transformation. GLANCDA leaders also announced upcoming regional Dealer Appreciation & Recruitment Dinners, designed to strengthen community ties, expand networking opportunities, and engage and welcome new members. Save the Date: Dealer Appreciation & Recruitment Dinner June 25 — Long Beach (555 East Steakhouse) Hosted by Tim Hutcherson, Peter Browning, Ian Thomas and John Davis Championing Workforce Development: New Scholarship and Student Initiatives In a proud milestone for the association, GLANCDA presented the inaugural Fritz Hitchcock Automotive Technician Scholarship to Estuardo Cuevas, a Cypress College student enrolled in Toyota’s T-TEN program. Cuevas attended the event with his family to celebrate this meaningful investment in the next generation of dealership technicians. 11
The scholarship initiative — led by Beth Hakes, daughter of the late Fritz Hitchcock — honors her father’s legacy of supporting education and technical excellence within the automotive industry. GLANCDA Executive Director Bob Smith also shared updates on ongoing workforce development efforts, including the upcoming High School Auto Tech Competition scheduled for May 16 at Rio Hondo College. Now in its 20th year, the competition brings together top student technicians from across the region to compete for tool scholarships and prizes, showcasing emerging talent and bolstering dealer hiring pipelines. A Strong Community Presence Education and nonprofit partners once again played an important role in this year’s event. Representatives from more than 20 community colleges and high schools with automotive programs were in attendance, along with philanthropic partners such as Homeboy Industries, Boys & Girls Clubs of America and Habitat for Humanity. Their presence reflects GLANCDA’s long-standing commitments to engaging with the community, uplifting the Greater Los Angeles area and creating pathways to high-quality automotive careers. A Successful Start to 2026 This year’s Member Luncheon and Annual Meeting showcased everything that makes GLANCDA a cornerstone of the Southern California automotive community: leadership, collaboration, service and a shared commitment to the future of the industry. With new initiatives underway and dealer engagement events on the horizon, 2026 is shaping up to be a year of growth, connection and continued excellence for the association. 12
ASK ALISON Has Your Dealership Considered a Medical Captive? By Alison McCallum, EPIC Insurance Brokers and Consultants Auto dealerships are under increasing pressure from rising healthcare costs, unpredictable renewals and little visibility into where their benefit dollars are actually going. There is a solution to these problems. Has your dealership considered a medical captive? Medical stop loss group captives can offer a smarter, more strategic alternative — combining the flexibility of self-funding with the protection of shared risk. Whether you operate a single rooftop or a multi-location group, this model allows you to design a benefits plan around your workforce, with control over deductibles, networks, TPAs and pharmacy programs — without being locked into a one-size-fits-all fully insured plan. What makes captives especially powerful is the shift from being a passive buyer of insurance to an active participant in your financial outcome. Dealerships in captives can benefit from: • Stabilized Costs: Reduce renewal volatility and avoid constant carrier changes • Profit Retention: Potential to earn back unused underwriting dollars as dividends • Full Transparency: Clear insight into claims, cost drivers, and where your money is going • Data-Driven Decisions: Ability to evaluate vendor performance and optimize your plan • Custom Cost Management: Tailor networks, PBMs and plan design to your specific workforce • Collaborative Advantage: Learn and share best practices with other high-performing companies Dealerships that continue to rely on traditional insurance can remain stuck, reacting to annual increases. Captives can allow you to gain control, improve outcomes and position your benefits program as a financial advantage instead of a fixed expense. The question is: Have you explored whether a medical stop loss captive is the right fit for your dealership? Would you like to see a comparison of how captive insurance differs from traditional self-funding? Partnering with an experienced broker who is well-versed in the unique dealership industry is indispensable. If you would like more information on captives, Alison McCallum of EPIC will provide details to GLANCDA members at no cost. EPIC ranks among the top 15 retail insurance brokers in the United States and is the largest insurer of auto dealers in the state. Alison McCallum has been in the employee benefits industry for over 20 years and personally works with more than 80 California dealerships. She is a principal with EPIC Insurance Brokers and Consultants. EPIC offers unique dealership expertise and services available to GLANCDA dealer members at no cost. If you have questions or would like further information, please feel free to contact her at alison.mccallum@epicbrokers.com or (949) 417-9136. 13
California’s Premier Dealerships REGAIN MOMENTUM Post‑CARB Clarity By Jayson Crouch, Managing Director, Haig Partners LLC California has reasserted itself as one of the most consequential automotive retail markets in the United States. As the nation’s largest vehicle market, the state benefits from exceptional density, affluent consumers and a deeply embedded culture of mobility. Greater clarity around CARB policy and long-term regulatory direction has restored buyer confidence. Capital is once again being deployed decisively across the state. Premier import and luxury franchises in strong demographic corridors are commanding exceptional interest. Through our active engagements across California, we have observed valuations for top-tier assets increase approximately 20% from levels seen during peak regulatory uncertainty. Sophisticated buyers are underwriting long-term performance with conviction. Many well-capitalized buyers paused in 2025 amid macroeconomic and regulatory uncertainty. With improved visibility today, buyer activity has accelerated meaningfully. Sellers of high-quality, well-positioned assets are entering the market with confidence and achieving compelling results. I recently had the privilege of advising on the sales of Santa Monica BMW and Acura of Fremont. In both engagements, a disciplined and confidential process led to strong outcomes for our clients. We currently have multiple additional California transactions progressing forward with active buyer interest across several franchise brands: • Sonic Automotive became the largest Jaguar Land Rover retail ownership group in the United States by volume following acquisitions across Los Angeles, Newport Beach, San Jose and Pasadena. • Lithia & Driveway expanded in Orange County and added Porsche Beverly Hills and Santa Monica Audi in one of the country’s most affluent luxury corridors. • Penske Automotive Group strengthened its California presence through acquisitions, including Longo Toyota and Longo Lexus in El Monte and Lexus of Stevens Creek in San Jose. • Franchise Equity Partners entered the state through a minority investment in SoCal Penske Dealer Group, while Go Auto expanded into Southern California through Sunrise Ford acquisitions. These transactions reflect sustained strategic conviction in the durability and scale of California’s automotive economy. California remains complex. The sustained advocacy of organizations such as the New Car Dealers Association of San Diego and the Greater Los Angeles New Car Dealers Association has contributed meaningfully to regulatory visibility and supported dealership values statewide. For owners evaluating strategic alternatives, I welcome a confidential conversation. Contact me at jayson@haigpartners.com. 14
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A Multi-Case Review By Joe Jankowski, Managing Member, Armatus Dealer Uplift Introduction Over the past several years, discrepancies have emerged in how manufacturers evaluate and approve dealers’ warranty parts and labor rate adjustment requests. Across multiple stores and years, dealers have observed inconsistent application of rules and policies, shifting and inconsistent interpretations of “warranty-like” qualifications, and contradictory inclusion and exclusion decisions. These inconsistencies — found in submissions for a given store year-over-year, in parts and labor submissions for the same store(s), and between similarly situated dealers — constitute what can only be described as disparate treatment. This article presents multiple documented examples illustrating how identical or near-identical repair orders and methodologies have been treated differently by the same manufacturer under changing or variable internal guidelines. Each case study highlights the lack of evaluation consistency, transparent standards and uniform enforcement of manufacturer policies across all dealer submissions. Case Study 1: Same Store Parts and Labor Submissions with Different Rules A dealer submitted requests for warranty parts and labor rate increases during mid-2025. The requests were submitted to their manufacturer in quick succession — both within a one-month period. After reviewing the labor request (which was submitted for review first), the manufacturer approved the dealer for a slightly reduced warranty labor rate, having made several adjustments inconsistent with rules and policies upheld in years prior. Just two days later, the dealer filed a parts request using nearly the same set of repair orders; 89 out of 90 days used in each request overlapped, with a variance of only a single day. Each submission was prepared under identical rules, with parts having been adjusted based on the manufacturer’s RO-by-RO feedback as provided in response to the dealer’s labor request. Despite the nearly identical range, the manufacturer cited and adjusted the handling of 19 entirely different repairs that were not cited in the manufacturer’s Disparate Treatment by Manufacturers in Warranty Parts & Labor Rate Increase Evaluations review of the previously approved labor sample. In other words, the manufacturer’s rules regarding what constitutes a “qualifying repair” had changed within just a 48-hour period. The dealer, therefore, requested that the parts markup be approved using the same methodology and logic that governed the labor approval, proposing an amended markup aligned with the original figure requested, rather than the three-point reduction resulting from this disparate treatment. When submissions are prepared utilizing the same methodology, manufacturers should ensure parity across evaluations. Divergence in review criteria between labor and parts requests undermines procedural fairness and erodes dealer confidence in manufacturer processes. Case Study 2: Statutory Interpretation and Shifting Rules In another case, a dealer challenged a manufacturer’s inconsistent interpretation of a state warranty statute, year-over-year, with no relevant change to the state statute in reference. In early 2025, the manufacturer in question cited the absence of “warranty-like” language in the applicable state statute, asserting that repairs completed due to damage/outside influence (rodent damage, accident damage and other factors that would never be covered under a manufacturer warranty) should be included in the calculation. This interpretation was completely off base, considering the entire intent of the statutory language is to include work that would be covered under a manufacturer’s warranty and to exclude work that is not. The manufacturer’s very own behavior contradicted their previously stated stance. In 2023, the manufacturer took the exact opposite stance to reduce the exact same dealer’s request, having stated that repairs completed due to “outside influence” should be removed from the calculation, only to reverse that position in 2025 when doing so worked to the manufacturer’s advantage. In both cases, the stance taken resulted in a submitted rate that was reduced; the exclusion of such 16
and/or non-warranty like circumstances, and disregarding the manufacturer’s 2024 stance that these categories should now be included. Surprisingly, the manufacturer reverted to the pre-2024 standards, approving both parts and labor submissions without any adjustments, and without reference to the prior year’s disagreements. When manufacturers apply policies regarding the qualification of repairs inconsistently and without rationale or notice in determining retail warranty rates, dealers are left with uncertainty and doubt regarding manufacturer expectations and intentions to reimburse their dealers at true retail. Conclusion Across all cases, one theme persists: inconsistent manufacturer application of evaluation criteria. Dealers have demonstrated that identical methodologies, repair categories and submission frameworks have been treated differently depending on timing, store or request type. This body of evidence illustrates how some manufacturers change their interpretation of statutory language, whether in designating “warranty-like” qualifications, adhering to state statute requirements or determining inclusion and exclusion of specific repair categories based on internal criteria. This is not an indictment of all manufacturers; in all fairness, there are several of them that properly adhere to statutory requirements and have a consistent application of their internal policies. For fairness and credibility to prevail in manufacturer-dealer relationships, evaluation criteria should be applied uniformly, transparently and consistently across all rate requests — regardless of year, dealer or submission type. Only through consistency can the process maintain legitimacy and support mutual trust between dealers and manufacturers. Joe Jankowski is the managing member of the Hunt Valley, Maryland-based Armatus Dealer Uplift, a firm specializing in retail warranty reimbursement submissions. Armatus has completed over 22,000 successful submissions nationwide. Joe has been personally involved in consulting on 25 retail warranty statutes and is widely recognized as a subject matter expert in this highly technical arena. Previously, Joe spent more than 20 years as CFO, COO and CEO of a large automotive group in Maryland. repairs reduced the dealer’s approved rate in 2023, while the inclusion of this category reduced the approved rate in 2025. Having taken notice of this contradiction, the dealer asserted a claim of disparate treatment, arguing that the manufacturer’s inconsistent rule application constituted an unfair practice. However, the manufacturer was unwilling to amend their stance, ultimately stating that their handling of the request in 2025 was aligned with the state statute’s guidelines, offering no further insight as to why the dealer’s requests were handled differently, year-over-year, following the same statutory guidelines. When manufacturers alter interpretive positions without a transparent rationale, they invite credible claims of disparate treatment. Even if statutory language supports flexibility, manufacturers should maintain internal consistency to preserve fairness and trust. Case Study 3: Year-over-Year and Store-to-Store Inconsistency Between 2020 and 2023, this dealer completed retail warranty submissions successfully under state law without issues, achieving full approvals for each request. Over the course of this time frame, the manufacturer in question consistently excluded certain repair categories as maintenance and/or “not warranty-like” — including brakes, wiper blades, keys, wheel locks and carbon cleaning, to name a few — from retail warranty calculations. In 2024, however, with no change to the language in the state statute, the manufacturer erroneously included these categories for the first time without explanation, significantly lowering the dealer’s requested rate. The dealer challenged the inconsistency, citing the handling of their requests in years past and the non-warranty-like nature of the now-included repairs. In 2025, just a few months later, the dealer proceeded with submitting new requests for both parts and labor, following the same policies that the manufacturer had followed from 2020-2023 — excluding categories consistent with maintenance 17
MANNING LEAVER LEGAL LANE The regulatory landscape facing California motor vehicle dealerships today is a high-stakes environment where the rules of the road are constantly shifting. For dealership professionals, navigating this terrain requires more than a basic understanding of sales; it demands a rigorous commitment to legal compliance with federal and state statutes, administrative regulations and evolving court decisions. The complexity of this environment is only increasing with the upcoming implementation of the California Combating Auto Retail Scams (CARS) Act, set to take effect on Oct. 1, 2026. Notably, while a Federal Trade Commission (FTC) rule of a similar name was recently vacated by a federal appeals court, the California CARS Act, although much less burdensome than the FTC rule, will soon impose new obligations on dealers. This article provides a brief summary of certain advertising requirements to help dealerships with advertising compliance. The Foundation: Sources and Standards of Law To stay ahead, dealerships must recognize that advertising law is not a single set of rules but a multifaceted body of legal standards. The primary backbone of this framework consists of federal and state statutes. However, these statutes are given specificity and detail through regulations issued by government agencies, such as the FTC and state agencies. These agencies do not just write rules; they provide ongoing guidance and interpretations that reveal how they intend to enforce those laws in the real world. Furthermore, court decisions serve as essential benchmarks, interpreting how these laws apply to specific dealership scenarios. In California, two specific codes form the bedrock of advertising rules: the Business and Professions Code Section 17500 and the Navigating the Fast Lane Understanding California’s Advertising Laws By Wade Kackstetter, Esq., Partner, Manning, Leaver, Bruder & Berberich LLP Vehicle Code Section 11713(a). While the former applies to all businesses in the state, the latter is a specialized statute designed specifically for DMV license holders, including automobile dealerships. Together, they establish the industry’s “Golden Rule” for advertising: Advertisements must not be untrue or misleading. The Regulator’s Perspective. When a regulator reviews your ad, they aren’t looking for your intent to deceive. It is irrelevant whether you intended to be honest or whether a consumer was actually harmed or relied on the ad. Instead, the standard is objective: Is an ordinary person likely to be misled or deceived by the advertisement? If the answer is “yes,” your dealership is at risk. The Art of the Disclosure: Clear, Conspicuous and Consistent Disclosures are the primary tool for staying compliant, but they are often misunderstood. To satisfy legal standards, every disclosure must be clear and conspicuous. In the fast-paced world of digital and print media, this means the advertisement must actively draw the reader’s attention to the fine print. 18
For written materials, “clear and conspicuous” translates to specific visual best practices: • Size: The text must be large enough to be easily noticed and read by consumers. • Contrast: There must be sufficient contrast between the text and the background. • Purpose: A disclosure should never contradict the main message of the ad; its legal function is to clarify the offer or provide material terms, qualifiers and conditions. • Video: In a video, a disclosure should remain on the screen long enough to be easily read and understood. Price Advertising Price advertising is a cornerstone of dealership marketing, but it is also the area where many legal landmines are buried. Under current standards, when you advertise a vehicle’s price, it must be the total amount a purchaser will pay. What Is Excluded From the “Total Price?” California law is very specific about what does not have to be included in the advertised total price and allows the following to be excluded: • Taxes and vehicle registration fees, • The California tire fee, • Emissions testing charges, • Finance charges, • Dealer document processing charges (see, however, the discussion that immediately follows) and • Charges for electronic registration or transfer of the vehicle. If these items are excluded, a mandatory disclosure statement is required, namely a disclosure substantially similar to the following: “Plus government fees and taxes, any finance charges, any dealer document processing charge, any electronic filing charge and any emission testing charge.” Note, however, on March 13, 2026, the FTC sent a warning letter to many dealership groups, taking the position that the exclusion of any non-governmental fees, such as the dealer 19
document processing charge, from an advertised vehicle price is illegal. The FTC has since confirmed this position. Under these circumstances, to avoid a compliance issue with the FTC, dealers should include all non-governmental fees in their advertised total prices. The MSRP Trap. The advertised price is a ceiling, not a suggestion. Dealerships are legally prohibited from selling a vehicle for more than its advertised price. This can become tricky when the Manufacturer’s Suggested Retail Price (MSRP) is advertised for a specific vehicle. If you list an MSRP that is not the actual total price, you risk creating a misleading impression. Dealerships must be careful to ensure that a consumer doesn’t mistake a listed MSRP for the vehicle’s total price. Moreover, the FTC has recently stated that the most prominent price in advertising must be the asking price for the vehicle, inclusive of all non-governmental fees. Thus, if the MSRP is advertised but is not the actual total price (including all dealer fees) for a specific advertised vehicle, the actual total price must also be advertised more prominently than the MSRP. The CARS Act will impact this as well, as discussed below. The 2026 Shift: The California CARS Act Impact Among other things, the California CARS Act represents a tightening of price transparency. Under this Act, the disclosure of the “total price” becomes mandatory in a wider variety of contexts: 1. Vehicle References: Any ad referencing a specific vehicle for sale must disclose the total price. 2. Monetary and Financing Terms: Any ad representing a monetary amount or a financing term for a specific vehicle must include the total price. 3. Direct Communication: The Act requires a total price disclosure in the first written communication to a consumer that mentions a specific vehicle, a monetary amount or a financing term. Because the CARS Act requires the total price to be included in these situations, if the MSRP is not the total price for a specific vehicle advertised, the total price must be disclosed either alongside or instead of the MSRP. Rebates: The “Net Cost” Calculation Rebates are a powerful sales tool, but they are strictly regulated to prevent “phantom” pricing. Dealerships are prohibited from advertising their own dealer rebates, though factory rebates are permitted if they are expressed in specific dollar amounts. These tips can help you stay compliant when advertising factory rebates: • Math Transparency: A good practice has been to show the actual total price first, then show the deduction of the rebate, and finally display the resulting “net cost.” • The “Anti-Stacking” Rule: You cannot “stack” conditional rebates, such as combining military, first responder and college student discounts, to reach an artificially low net cost that almost no customer could qualify for. Moreover, you should not advertise a rebate with conditions that conflict with the conditions of another rebate in the stack, or that cannot be combined with another rebate included in the stack. In its March warning letter, the FTC states that it is illegal to advertise a price that reflects rebates or discounts not available to all consumers. We are awaiting clarification of whether the FTC would also prohibit the use of such conditional rebates in price stacks and net cost calculations, even when permitted in advertising under California law. • Disclosure of Conditions: Any material requirement to receive a rebate (e.g., residency or military status) must be clearly stated. Deep Dive: Vehicle Financing and Regulation Z When advertising financing, you must be aware of “trigger terms” defined under Regulation Z. If your ad uses even one of these terms, you are legally obligated to provide a full suite of additional disclosures to ensure the consumer understands the true cost of credit. The trigger terms of Regulation Z: • The amount or percentage of the required downpayment. • The number of payments or the period of repayment. • The amount of any payment. • The amount of any finance charge. The Required Disclosures. Once a trigger is pulled, your advertisement must also include: 1. Downpayment Details: The specific amount or percentage downpayment required. 2. Repayment Terms: This includes the number of payments and either the specific monthly payment amount or the payment per unit of financing amount (e.g., payment per $1,000 borrowed). 20
3. The APR: The annual percentage rate must be clearly stated using that exact term or the abbreviation “APR.” 4. Credit Approval: Since credit approval is required, you must disclose that the offer is “on approved credit.” Furthermore, under the CARS Act, any advertisement containing these financing terms for a specific vehicle must also prominently disclose that vehicle’s total price. Deep Dive: Leases and Regulation M Leasing advertisements are governed by Regulation M, which operates on a “trigger” logic similar to Regulation Z but with its own set of specific requirements. Because leases are complex, regulators require more detailed disclosures to prevent consumers from being misled about their financial obligations. The trigger terms of Regulation M: • The amount of any payment (e.g., $399 per month) • A statement of any capitalized cost reduction, or other payment, required when the lease starts, or that no payment is required (e.g., $1,500 down, or $0 due at signing) • Any mention of a required capitalized cost reduction. The Required Disclosures. If any trigger term appears, the ad must also disclose: 1. The Nature of the Transaction: You must explicitly state that the transaction is a lease. 2. Total Due at Start: The full amount the consumer must pay at the beginning of the lease. 3. Payment Schedule: The number of payments, the amount of each, and their due dates. 4. Security Deposit: Whether or not a security deposit is required. 5. Mileage Terms: The mileage limitation and the specific charge for any excess mileage. 6. Tax and License: The statement “plus tax and license” if amounts due for use tax, license and registration fees are not included in the advertised lease payments, which is typical. 7. Credit Approval: Like financing, an “on approved credit” disclosure is mandatory. The Equal Prominence Rule: If you advertise “$0 down” or a specific component of the total due at the start of the lease (other than the monthly payment amount), it cannot be more prominent than the total amount due at lease signing. The Third-Party Myth: Why You Can’t Outsource Liability A dangerous misconception is that external partners, such as advertising vendors or manufacturers, will handle the legal heavy lifting. If your dealership runs an ad that violates applicable law, you are responsible for it. Relying on a third party for compliance is typically not a valid legal defense. The Vendor Gap. Many advertising vendors lack a deep understanding of California’s heightened compliance standards, which are often stricter than those in other states. The Manufacturer Gap. Manufacturers often require ads to go through their own compliance processes for co-op reimbursement purposes. However, these compliance reviews are typically intended to protect the manufacturer’s brand and its advertising requirements, not to ensure the dealership meets all legal requirements. Furthermore, OEM-provided ad copy and disclosures are usually written for a national audience. They are often not tailored to California’s specific legal requirements or the unique needs of an individual dealership. In fact, disclosures that are perfectly legal for a manufacturer to use may not be legally compliant for a dealership. The Price of Non-Compliance The consequences of cutting corners on advertising compliance are severe. Beyond the immediate financial hit, a single misleading ad can trigger: • Time-Consuming Lawsuits: These can drain resources and focus away from sales. • FTC Consent Decrees: These can place a dealership under federal supervision and restrict its advertising, often for up to 20 years. EPICBROKERS.COM ©2026 Edgewood Partners Insurance Center. All rights reserved. | CA License: 0B29370 EPIC Insurance Brokers & Consultants is proud of its partnership with more than 300 California dealerships and is the CNCDA’s only licensed broker for health insurance and employee benefits. As the dealers’ consultant, experience what EPIC can do for you, including: • A team producing significant results with decades of experience understanding the specific needs of dealerships • Fully insured and unique alternative funding options to best fit your dealership’s needs and provide the most significant savings • Full compliance services and HR support for your team FOR A BENEFIT COST ANALYSIS AND COMPLIANCE CONSULTATION, PLEASE CONTACT: Alison McCallum (949) 422-6431 alison.mccallum@epicbrokers.com 21
• DMV Actions: The DMV has the authority to suspend or revoke a dealership’s license for compliance failures. • Criminal and Other Penalties: In extreme cases, fines, injunctions and even criminal charges are possible. • Reputational Erosion: Misleading ads destroy customer trust and satisfaction, which are the lifeblood of a sustainable business. Action Plan for 2026 and Beyond To protect your dealership in this evolving environment, implement these three compliance strategies: 1. Establish Internal Accountability: Appoint a management-level employee to oversee and be personally accountable for all advertising law compliance. 2. Invest in Training: Ensure every employee involved in the creation or approval of advertisements is trained in current legal requirements. 3. Leverage Legal Counsel: There are many other advertising laws, and this article only scratches the surface. Work with experienced legal counsel to audit your existing materials, develop compliant advertising templates and provide a review of new campaigns. The California New Car Dealers Association also provides resources to help dealerships with legal compliance, including the California Auto Dealer Advertising Law Manual, authored by Manning, Leaver, Bruder & Berberich LLP. The author of this article is a partner at Manning, Leaver, Bruder & Berberich LLP, a Los Angeles law firm that practices throughout California and has been in existence for over 100 years. It has a strong automobile dealer practice covering all areas related to the automobile dealer industry, including dealership buy-sells, real estate transactions, business and consumer litigation, regulatory compliance, dealer advertising law, dealer association law, new motor vehicle board matters and franchise law. See www.manningleaver.com for more information and areas of practice. Nothing in this article may be considered as legal advice. Contact legal counsel for legal advice. 22
Insurance costs for auto, garage liability, EPLI and Workers’ Compensation (WC) continue to climb. For WC policies effective Sept. 1, 2025, the California Department of Insurance has approved a rate increase of about 9%. Other states are also in the same league. It is a good time to learn how premiums are calculated and how to reduce them. Background Workers’ Compensation (WC) insurance is mandatory in the United States and many other countries. It ensures employees receive medical treatment and disability benefits for workplace injuries, while protecting employers by providing immunity from employee lawsuits for alleged negligence. WC premiums are paid entirely by employers and represent a significant, manageable business expense. Rate increases are attributed to significant increases in legal expenses (see the ads on the sides of the highways), rising medical and claims costs, more cumulative trauma claims and increased claim adjustment expenses. Cost Containment WC premiums are calculated using a base rate that reflects job duties, payroll size, and the number of employees. This base rate is then adjusted by an experience modifier (X-Mod) that is directly tied to the frequency and severity of workplace injuries. Losses are Workers’ Compensation, Experience-Modifier, and How Litigation Is Adding to Your Claims By Sam Celly, MS, JD, CSP, President and CEO, Celly Services Inc. 23
calculated from claims paid by the insurance company, so every claim impacts your premium for multiple years. Preventing injuries is the most effective cost-control strategy. We assume you are running a lean operation with payroll expenses under control. Proactive Steps Reducing both injuries and claims starts with a proactive approach to safety and claims management. Employers should: • Form and maintain an active Safety Committee. • Designate an approved medical clinic. Seek a clinic approved by your insurance carrier and post details on your employee notice board. • Encourage open communication. • Document thoroughly: º Accident investigation º Employee statement of injury º Employee counseling º Declination of treatment by employee • Verify coverage for contractors working on your premises, e.g., detail company, gardeners, etc. Get coinsured on their policies. Your WC policy covers only employees on your payroll! Post-Claim Steps • Promptly report all claims to the carrier — even declinations with signed forms. In California, the 90-day rule for workers’ compensation claims means that if the insurance carrier fails to accept or deny a claim within 90 days of it being submitted to the employer, the claim is presumed accepted. Any delay in submitting claims can result in claims being accepted by default, even the fraudulent ones, and they can cost you a pretty penny. • Ensure supervisors investigate each claim and notify your carrier if legitimacy is in question. Flag the three Fs: frivolous, fictitious and fraudulent. If a third party is at fault, pursue subrogation. • Offer modified duty, when possible, to reduce costs. If an employee denies a bona fide modified work duty offer, the insurance company can stop the payments on indemnity. • Work closely with your claims adjuster by providing the requested information quickly for efficient claim handling. Managing Claims Stay actively engaged in the claims process — ask for updates frequently. Open claims with high reserves are a major reason X-Mods increase. Remember that legal expenses do not affect your X-Mod, but illegitimate claims should always be challenged. Sometimes settling quickly is more cost-effective than allowing claims to linger. For litigated cases, voluntary resignations may be part of the settlement strategy. The best claim is one that is prevented, and the next best is one that is promptly closed. Calculating Costs We used payroll data and losses incurred over a four-year period to calculate an employer’s workers’ compensation premium. For example, the 2025 X-Mod basis for policy renewal on Jan. 1, 2025, is WC claims from 2021, 2022 and 2023. Although claims from 2024 are excluded from the X-Mod calculation, they remain critical for underwriting. Even with a favorable or “credit” X-Mod, a dealership with multiple recent claims may be viewed by carriers as having a weak safety culture, which can lead to fewer quotes and/or higher premiums. Before submitting data, ask: • Is your payroll data correct? Payroll data for the service department that includes both technicians and service drivers will cost you. The risk for service advisors working behind computer screens in an air-conditioned office is significantly lower than that of a technician working in the shop, facing physical risks from moving machinery and heavy lifting; hence, a lower premium rate is applied to advisors. Ensure they are classified differently. • Are X-Mods calculated correctly? According to insurance brokers, 75% of all X-Mods are incorrect. • Are subrogated and joint claims included or missing? Cost Savings To illustrate insurance premium calculations (which may vary based on the difference in injury rates), hypothetical calculations were made for two employers, Employers I and II, who have the same payroll. Table A shows the payroll data for each type of employee. Table B illustrates the excessive injuries of Employer I and Employer II. Employer II has four more injuries than Employer I, resulting in a total loss of $282,500, compared to a total loss of $45,004 during the same period. While the insurance company pays these losses, the difference between the two premiums is $174,540. A savings of $174,540 due to fewer injuries (Employer I, see Table C) provides a competitive advantage. The fact that injuries affect the premium rate for three consecutive insurance years highlights the importance of preventing workplace injuries. Investing in time, training and equipment for employees is worthwhile, especially given the magnitude of premium savings described in our example. The benefits of being a caring and proactive employer in terms of employee productivity and morale are an important additional consideration. Class Code 8391A vs 8391B (CA only) • Class code 8391A applies to service technicians, porters and drivers. Any employee of the dealership who is engaged in repairs, maintenance, service, detailing or cleaning of automobiles or trucks should be assigned to this class code. Any employee engaged in driving or transporting automobiles or trucks should also be assigned to this code, as should parts drivers. • Class code 8391B applies to service writers, estimators, parts managers, parts counter-persons and service managers. 24
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