Education That Drives Results Building Stronger Dealerships Through Expanded Training 2026 PUB. 14 ISSUE 1 OFFICIAL PUBLICATION OF THE NEW CAR DEALERS ASSOCIATION SAN DIEGO COUNTY
BUSINESS LAW | LITIGATION | ESTATE PLANNING | REAL ESTATE | TAX | EMPLOYMENT PRACTICES FERRUZZO & FERRUZZO, LLP | A Limited Liability Partnership, including Professional Corporations FERRUZZO.COM | CALIFORNIA | TEXAS Business Transactions • Buy-Sell Agreements • Entity formation and structure • Shareholder Agreements • Manufacturer approvals and relations Employment Practices • Arbitration agreements • Wage and hour class action lawsuits • Private Attorneys General Act (PAGA) claims • Employee handbooks and compliance Estate Planning • Succession planning for business continuation • Family estate planning (wills and trusts) Tax • Property tax planning, audits and appeals • EDD audits Business Litigation • Consumer Legal Remedies Act lawsuits • Sales and Service Agreements • Disputes before the CA New Motor Vehicle Board • Manufacturer audit disputes • Hearings before the AQMD, RWQC and OSHA Real Estate • Dealership site acquisitions and lease agreements • Lender opinion letters An Automotive Industry Authority For over 40 years, Ferruzzo & Ferruzzo, LLP has been a leading authority in the Automotive Industry. Our team of auto-focused attorneys provide a spectrum of legal services to support every aspect of running and owning your new car and/or truck dealership. Solving Your Challenges, Together
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?® Crystal Moreno, crystal.e.moreno@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.
©2026 The New Car Dealers of San Diego (NCDA) | Memberlink Solutions DBA The newsLINK Group LLC. All rights reserved. San Diego Dealer is published four times per year by The newsLINK Group LLC for NCDA 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 NCDA, 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. San Diego Dealer is a collective work, and as such, some articles are submitted by authors who are independent of NCDA. 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. CHAIRMAN PAUL DYKE............................. DISTRICT 4 VICE CHAIRMAN SCOTT KIEFNER..................... DISTRICT 6 SECRETARY/TREASURER JENIFER BALL......................... DISTRICT 6 PAST CHAIRMAN JOHN SEGAL........................... DISTRICT 3 BOARD MEMBERS ANTHONY BENFATTI............ DISTRICT 1 MATT CRANDALL.................. DISTRICT 2 PAUL FILLMORE..................... DISTRICT 3 BANU GREWAL...................... DISTRICT 3 MAX JOHNSON...................... DISTRICT 1 GREG KAMINSKY................... DISTRICT 4 JASON MOSSY........................ DISTRICT 5 MANNY SEDANO................... DISTRICT 5 JOHNNY SIEPKER................... DISTRICT 2 NCDA STAFF SCOTT WEBB PRESIDENT DIANA SWEITZER ACCOUNTING AND ADMINISTRATION MANAGER TYLER GRAY MARKETING & OPERATIONS MANAGER CLAUDIA OLVERA MEETING AND FACILITIES COORDINATOR ROBERT HEINTZ CALIFORNIA SALES TRAINING ACADEMY INSTRUCTOR Contents 10065 Mesa Ridge Ct. San Diego, CA 92121 Tel: (858) 550-0080 Fax: (858) 550-9537 ncda.com 14 Publication 14 | 2026 Issue 1 5 Chairman’s Letter By Paul Dyke, Chairman, New Car Dealers Association 6 Education That Drives Results Building Stronger Dealerships Through Expanded Training 10 Here’s How Employers Can Get Smarter About AI Use in 2026 By Fisher Phillips 14 Workers’ Compensation, Experience-Modifier and How Litigation Is Adding to Your Claims By Sam Celly, MS, JD, CSP, President and CEO, Celly Services Inc. 19 Tariff Engineering Legal Maneuver or Illegal Evasion? By Scali Rasmussen, with contributions from Halbert Rasmussen, Shareholder, and Eric P. Weiss, Principal 21 Uplift Your Employees by Promoting Back Injury Prevention By Federated Insurance 22 California Automotive Technology Career Day 23 Welcome New Associate Member! Parker Insurance 24 2026 Retirement Contribution Limit Adjustments 25 San Diego Auto Outlook 27 Save the Date: May 6, 2026 NCDA Golf Tournament + Annual Meeting & Luncheon 6 4 SAN DIEGO DEALER
I want to extend my warmest wishes to you, your families and your teams for a healthy, successful and prosperous 2026. Reflecting on the past year, 2025 was a reminder of the resilience and adaptability of franchised new-car dealers. We entered the year with strong sales momentum, driven by improved inventory levels and renewed consumer interest. As the year progressed, however, that initial strength was tempered by growing economic uncertainty. Rising costs, some influenced by global trade policy, continued to pressure operations, while persistently high interest rates affected both consumer affordability and dealer financing. At the same time, the marketplace grew more complex. Demand for electric vehicles proved volatile as incentives shifted and consumer preferences evolved, and intensified price competition across the industry challenged margins. Through it all, dealers demonstrated remarkable discipline, innovation and commitment to their customers and communities. The challenges we’ve faced highlight one of the core truths of our industry: Franchised dealers are problem-solvers. The challenges we’ve faced highlight one of the core truths of our industry: Franchised dealers are problem-solvers. You adapted to changing demand, managed through cost pressures, invested in your people and facilities, and continued to deliver exceptional service, even in an unpredictable environment. Dealers can gain an edge in such a competitive environment through knowledge and training. Recognizing this, your New Car Dealers Association made education a top priority in 2025, significantly expanding its seminar schedule to deliver timely, practical, high-value programs for dealers and their teams. As detailed in this issue, these expanded offerings emphasized in-person learning, compliance readiness, leadership development and operational excellence, providing members with actionable tools to navigate rising costs, regulatory complexity, shifting vehicle demand and intensifying competition. As we look ahead, uncertainty remains, but so does opportunity. Our association will continue to advocate for policies that support a fair, competitive marketplace and provide dealers with the stability needed to plan, invest and grow. Just as importantly, we will work together to share insights, strengthen our collective voice and ensure our industry is positioned for long-term success. Sincerely, Paul Dyke Chairman’s Letter By Paul Dyke, Chairman, New Car Dealers Association NCDA.COM 5
Education That Drives Results Building Stronger Dealerships Through Expanded Training As the automotive industry continues to evolve, so too does the way we learn and connect. While webinars and virtual sessions remain a valuable part of our education toolkit, in-person training and seminars offer unique opportunities for engagement and interaction that virtual formats simply can’t replicate. THE POWER OF IN-PERSON TRAINING Dealership professionals attending live events benefit from real-time dialogue with instructors and peers, spontaneous Q&A exchanges, hands-on demonstrations and the kind of networking that often happens outside the classroom, often over a coffee break or between sessions. These face-to-face interactions foster deeper understanding, stronger relationships and collaborative problem-solving in ways that are difficult to achieve through screens alone. Studies show that teams meeting in person can generate 15-20% more ideas than those meeting virtually, and that informal interactions play a significantly larger role in community building and professional connections at live events compared to virtual formats. After years of relying on virtual events, the business and professional education world has seen a notable shift back to in-person formats. For example, the percentage of organizations hosting in-person conferences rose from 37% in 2021 to 49% in 2022, signaling renewed confidence in live events and human connection. Moreover, surveys of adult learners show that a strong majority, approximately 60% or more, still prefer in-person learning environments, particularly when hands-on skills, networking and interactive discussions are involved. This shift reflects a broader enthusiasm among professionals to learn, collaborate and build relationships face-to-face, a dynamic that NCDA’s training calendar is designed to support. Whether engaging directly with compliance experts, sharing insights with 6 SAN DIEGO DEALER
peers or participating in structured group activities, in-person training provides richer, more memorable experiences than virtual alternatives alone. EXPANDING OUR TRAINING FOOTPRINT The New Car Dealers Association of San Diego County (NCDA) will continue to prioritize training and professional development this year, offering more opportunities than ever for dealers and their teams to enhance skills, stay ahead of industry trends and elevate operational excellence. In 2025, NCDA significantly expanded its seminar and workshop offerings. From compliance and regulatory updates to EV readiness, sales training and best practices for fixed operations, our goal has been simple: to provide meaningful, high-value education that directly supports dealership success. TRAINING PROGRAM HIGHLIGHTS CNCDA New Laws Seminar As part of our commitment to keeping dealers informed and compliant, NCDA once again hosted CNCDA’s annual New Laws Seminar. Last year’s presentation addressed the wide range of legislative changes approved in Sacramento in 2025, including SB 766 (the California CARS Act), which takes effect Oct. 1, 2026, and brings major updates to vehicle advertising and sales requirements. CNCDA President Brian Maas, Chief Legal Officer Anthony Bento, Director of Government Affairs Kenton Stanhope, and attorney John Boggs guided attendees through upcoming laws, regulatory changes and what dealerships must do now to prepare. The seminar also offered 2.5 hours of MCLE credit, reinforcing its value for dealership legal and compliance professionals. NADA Professional Series Training Last year, NCDA proudly hosted the nationally recognized NADA Professional Series at our Training & Conference Center. These intensive, department-focused programs brought dealership professionals from across the region together for two days of specialized instruction followed by two additional days of leadership development. Training tracks included Service Management, Parts Management, Office Management, Sales Management and Leadership, each designed NCDA.COM 7
to strengthen operational performance and prepare emerging leaders for expanded responsibilities. The in-person sessions provided hands-on learning, real-world solutions and actionable strategies tailored to dealership life. F&I Compliance in California Workshop In partnership with KPA and Scali Rasmussen, NCDA hosted a half-day, in-person workshop designed to help dealerships navigate the complex landscape of F&I and sales compliance in California. Led by industry experts including Robert Ebin, Aaron Hartshorn, John Swenson and Christian Scali, attendees explored CA CARS requirements, sales floor and deal jacket compliance, misrepresentation pitfalls, advertising rules and how to strengthen internal processes to avoid costly penalties. EPA & OSHA Compliance Seminar Led by longtime industry expert Sam Celly of Celly Services and supported by surprise co-presenter attorney John Boggs, this session provided dealers and managers with practical guidance on environmental safety, workplace safety, and workers’ compensation compliance. Attendees gained actionable strategies for controlling costs, preparing for OSHA inspections, improving safety programs, managing claims and understanding documentation requirements. The seminar also covered accident investigation best practices, PPE standards, heat illness prevention and digital tools, such as QR-based inspection logs. SUPPORTING MEMBERS WITH REAL VALUE Every event we’ve hosted reflects NCDA’s commitment to delivering tangible member benefits. These programs are designed not only to inform but also to equip dealership staff with actionable insights they can apply immediately. As the industry continues to evolve, NCDA remains focused on helping our members adapt, grow and succeed. Thank you for being part of a vibrant, forward-thinking dealer community. CALIFORNIA SALES TRAINING ACADEMY (CSTA) In addition to our professional development seminars, the NCDA continues to operate the CSTA, our foundational training program designed to equip new and seasoned sales professionals with the skills and compliance knowledge required to succeed in California’s highly regulated retail automotive environment. Through structured instruction, real-world scenarios and a focus on ethical, customer-centric selling, CSTA supports dealerships in developing confident, effective sales teams while ensuring adherence to state requirements. Thousands of men and women have graduated from this course since its inception in 1991 and gone on to successful careers in automotive sales, with several reaching top-level management roles at new car dealerships in San Diego County. Many dealer members hire sales personnel and immediately enroll them in CSTA to gain the benefit of this essential training before they begin training at the dealership. The three-day sales training course is held from 9 a.m. to 3 p.m. on a bimonthly basis at our NCDA Conference & Training Center in Mira Mesa. Dates and additional information are available at www.ncda.com/training-seminars. 8 SAN DIEGO DEALER
Merriam-Webster named “slop” as its 2025 Word of the Year, citing the explosion of low-quality, AI-created digital content that now clogs our inboxes and social feeds. While employers and business leaders should view this news as a warning, it can also be an opportunity to set yourself apart. By combining the power of AI with a healthy dose of human judgment, you can capture the authenticity that people will crave more than ever in 2026. We’ll take a look at what slop is, discuss the problems it can cause and provide you with some practical steps you can take to eliminate it. AI Here’s How Employers Can Get Smarter About AI Use in 2026 By Fisher Phillips 10 SAN DIEGO DEALER
WHAT “AI SLOP” LOOKS LIKE AT WORK 2025 was the year that AI slop showed up in every aspect of your job. No doubt you have started to see an increase in: • Generic emails and corporate communications that all start to sound the same (sounding official but not saying much of anything) • Business content that’s repetitive, vague and quite possibly wrong • Resumes and cover letters that almost sound too good to be true, exactly matching your job postings • Performance self-evaluations or reviews containing flowery language and corporate jargon about “synergy” and “leveraging core competencies” • Marketing copy that looks polished at first glance but is immediately forgettable WHY EMPLOYERS SHOULD CARE AI slop is annoying, no doubt. But it’s not just an inconvenience — it’s a real business risk. (See what we did there? Did you cringe when you read that last sentence?) Here are some reasons why you should be concerned about the proliferation of slop in your workplace: • Brand Erosion: Low-quality content lets customers, recruits and employees know that you don’t care enough about them to put in the time to create quality work. Once that perception sets in, it’s hard to reverse. • Productivity Theater: AI slop often looks like productivity because your employees are churning out a lot of work in a short period. But what they’re actually doing is creating more downstream work through the inevitable revisions, clarifications and clean-up. • Cultural Damage: When employees are encouraged (explicitly or implicitly) to outsource their thinking to a robot, they can drift away from human judgment and creativity. This is a dangerous shift for any organization. • Legal Exposure: Sloppy AI-generated policies, contracts or employment communications can misstate legal obligations and conflict with existing policies. NCDA.COM 11
WHAT EMPLOYERS SHOULD DO TO AVOID AI SLOP The good news is that a few simple steps will help you use AI without creating slop. Here are five steps you can take to set guardrails that preserve human judgment, corporate accountability and quality of work. 1. Define “Acceptable AI Use,” Not Just “Permitted AI Use” The first generation of corporate AI policies, released in the wake of ChatGPT’s release and the subsequent explosion of GenAI (roughly 2023-2024), is already outdated. If you look at your company policy, it probably focuses on “AI is allowed for X.” But that’s not enough these days. Instead, you need to go further and spell out: • Where AI can assist and where it needs to be avoided • Where human judgment must lead • That AI output must always be reviewed before use 2. Assign Ownership for AI-Assisted Work Every AI-generated document should have a human owner responsible for ensuring accuracy, tone and consistency with the company’s values and policies. 3. Train Managers to Spot Slop Managers and content approvers don’t need to be AI experts, but they do need to recognize some of the telltale signs of AI usage so it can be edited out before release. • Overly generic language that could apply to any role, department or company • Perfectly structured paragraphs that lack a human voice, specificity, or the natural friction that comes along with human writing • Excessive use of em-dashes like this — often multiple per paragraph — to create the illusion of nuance • “It’s not just X — it’s Y” construction, used repeatedly to inflate ordinary points into faux insights (like “It’s not just a change — it’s a revolution”) • False confidence in incorrect or oversimplified statements, especially about legal, technical or operational issues • Repetition of the same idea using slightly different phrasing rather than adding new substance • Buzzword stacking (“synergy,” “alignment,” “value creation,” “impactful outcomes”) without concrete examples • Vague conclusions that gesture toward action without assigning ownership or next steps 4. Slow Down High-Risk Uses For legal, HR, compliance and external communications, make sure you require human review before anything is delivered. It will be almost impossible for AI to generate sound communications in these areas without human customization, often a great deal of it. 5. Measure Outcomes, Not Output You will want your organization to shift performance conversations away from questions like “How fast was this produced?” and “How many pieces of content did you develop?” Instead, consider whether the communication effectively solved the problem and reduced the need for follow-up questions. FP IS ALL IN ON AI — BUT THE RIGHT KIND OF AI Don’t get us wrong. Fisher Phillips is a massive supporter of AI. We host an annual AI Conference that brings together thought leaders from across the country. We hold dozens of webinars each year about AI use (including our popular AI Forums). We’ve published hundreds of AI-related Insights, have an active AI, Data, and Analytics Team, and offer products and services to help businesses master the use of AI. We understand the value it can bring to businesses and corporate leaders. But (with apologies to Spider-Man’s Uncle Ben), with great power comes great responsibility. By following the steps we’ve outlined, you can responsibly use AI without contributing to the scourge of slop. 12 SAN DIEGO DEALER
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Workers’ Compensation, Experience-Modifier and How Litigation Is Adding to Your Claims 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 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 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: • Accident investigation • Employee statement of injury • Employee counseling • 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! By Sam Celly, MS, JD, CSP, President and CEO, Celly Services Inc. 14 SAN DIEGO DEALER
“We have a fantastic relationship with the LSL team. They keep our interests top of mind and maintain a positive reputation in the industry.” —Craig Whetter, President | David Wilson Automotive Group (relationship since 1983) Adam Odom, CPA, Partner Assurance & Advisory adam.odom@lslcpas.com LSL | CPAs & Advisors | Irvine & Sacramento, CA | The Woodlands, TX | lslcpas.com/automotive | 949.829.8299 Donald Slater, CPA, Principal Consulting & Advisory donald.slater@lslcpas.com David Myers, MST, CPA, Partner Tax & Advisory dave.myers@lslcpas.com 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. On the next page, 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 NCDA.COM 15
$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. Table A: Payroll Data (Employer I & II) Employee Annual Payroll No. of Employees Payroll Year 1 Payroll Year 2 Payroll Year 3 Clerical/Office Staff (Code 8810) $50,000 20 $1,000,000 $1,000,000 $1,000,000 Sales Staff (Code 8748) $80,000 20 $1,600,000 $1,600,000 $1,600,000 Technicians (Code 8391A) $80,000 23 $1,840,000 $1,840,000 $1,840,000 Service Writers, Parts Counter, Parts and Service Managers (Code 8391B) $85,700 7 $600,000 $600,000 $600,0000 Total 70 $5,040,000 $5,040,000 $5,040,000 Table B: Injury Data and Losses Paid Per Injury Employer I Employer II Year Claim # Type of Injury Incurred Losses Type of Injury Incurred Losses Year 1 1 Cut Finger $1 Back Injury $50,000 Year 1 2 Cut Finger $1 Back Injury $7,500 Year 1 3 Broken Finger $10,000 Broken Finger $10,000 Year 1 4 Cut Finger $1 Elbow Sprain $5,000 Year 1 5 Head Injury $5,000 Head Injury $5,000 Year 2 6 Arm Rash $1 Fatality* $175,000 Year 3 7 Back Injury/ Cumulative Trauma $25,000 Back Injury/ Cumulative Trauma $25,000 Year 3 8 Arm Rash $5,000 Arm Rash $5,000 Total $45,004 $282,500 *Death benefits are statutorily limited in certain states. In California, death benefits are capped at $320,000. Only $175,000 is used in this sample calculation. 16 SAN DIEGO DEALER
Table C: Estimated Premium Costs Premium Based on Employee Count & Payroll Experience Modification Total 2025 Premiums (before credits) Employer I $264,500 0.85 $224,825 Employer II $264,500 1.51 $399,395 Note 1: Wages and employee count for employees (CA automobile dealership) in Table A are fictitious and used illustratively. Note 2: The Experience Modification in Table C utilizes California rates and formulas. Calculations for other states will vary. Note 3: Table C premiums are before underwriter’s “risk adjustment” debits, credits or premium discounts (if any). A good safety record can earn you discounts from reputable carriers. Conversely, a poor safety record will result in increased premiums. DISCLAIMER: Employers must consult with their WC insurance brokers for a better understanding of their WC premiums and safety consultants for matters related to safety. The contents of this article are for informational purposes only and are not to be considered as legal advice. The premium numbers are for discussion purposes, and actual numbers for X-Mod and premium calculations may vary on a case-by-case basis. Sam Celly of Celly Services Inc. has been helping automobile dealers comply with EPA & OSHA regulations since 1987. Sam received his BE (1984) and MS (1986) in Chemical Engineering, followed by a J.D. from Southwestern University School of Law (1997). Learn more at www.epaoshablog.com. Your comments/questions are always welcome. Please send them to sam@cellyservices.com. Stay compliant. Protect your bottom line. We have a combined 95 years of experience helping automobile dealers comply with EPA, IIP and OSHA regulations. Let our experts show you a new approach for managing compliance at your dealership. (562) 716-6100 cellyservices.com Spend less time on compliance issues and more time running your dealership. LET’S TALK! NCDA.COM 17
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NCDA.COM 19 Tariffs have long been used to regulate trade, and companies naturally seek ways to reduce costs. One legitimate strategy is known as “tariff engineering,” which involves designing or configuring a product to qualify for a lower tariff rate under customs classifications. For example, a company might ship unassembled bicycle parts to the United States and perform the final assembly domestically, allowing the import to qualify as “parts” rather than a complete bicycle, thereby paying a lower duty rate. While such planning is legal when done transparently and in compliance with customs regulations, improper execution, such as disguising the true nature of goods, can lead to severe penalties, as seen in Ford Motor Company’s recent case. At a time when trade policy shifts so quickly, engineering fixes aren’t the only tools in play; policy workarounds also operate alongside design choices, and both can materially affect costs and risk. HOW TARIFFS WORK Importers pay tariffs to U.S. Customs and Border Protection (CBP) upon entry into the United States. Tariffs are based on three factors: • Classification: The Harmonized Tariff Schedule (HTSUS) assigns tariff rates based on product type. • Country of Origin: Determined by where the product was made or substantially transformed. • Valuation: Used to calculate applicable duties and fees. WHAT IS TARIFF ENGINEERING? Tariff engineering involves altering a product’s design to fit a classification with lower tariffs. This could mean modifying materials, assembly or components. Courts have upheld that merchandise is classifiable “as imported,” allowing legitimate tariff engineering. However, deceptive modifications meant solely to evade duties may be illegal. Legal Basis Since the Supreme Court decision in Merritt v. Welsh, 104 U.S. 694 (1882), U.S. courts have consistently upheld the principle that importers may lawfully design or modify products to secure lower tariff rates, so long as no fraud or deception is involved. The Court in Merritt recognized that an importer has the right to make goods in such a manner as to avoid the higher duty if this can be done honestly. Subsequent rulings have reaffirmed that a product’s tariff classification is determined by its condition as imported, not by its intended use or post-importation processing, provided the importer does not misrepresent the goods. Ford Motor Company Case In the case of Ford’s “Transit Connect” case, Ford imported Transit Connect vans with temporary rear seats to classify them as passenger vehicles (2.5% duty) rather than cargo vans (25% duty). CBP viewed this as a scheme to conceal the vehicles’ true commercial purpose and reclassified them as cargo vans. The Court of International Trade upheld Ford’s position under the doctrine of tariff engineering, which allows lawful structuring of imports to obtain favorable duty treatment. The Federal Circuit reversed, emphasizing the vehicles’ intended use as cargo vans. Ford ultimately settled for $365 million, illustrating the narrow boundary between legitimate tariff engineering and unlawful evasion. (Ford Motor Co. v. United States, 926 F.3d 741 (Fed. Cir. 2019).) POLICY WORKAROUNDS: BEYOND ENGINEERING Beyond product design, governments are increasingly using policy tools such as quotas, offsets and targeted tariffs to steer automakers’ production and investment decisions. Recent actions in Canada and the United States highlight how trade incentives and penalties now complement traditional tariff engineering. Canada Tightens Remission Quotas After Production Shifts Ottawa curtailed tariff-free “remission” quotas that let automakers import a set number of U.S.-assembled vehicles duty-free into Canada, cutting Stellantis’s quota by 50% and GM’s by 24% after both firms announced pullbacks in Ontario. The move enforces prior job and investment commitments tied to the exemptions and signals that policy relief can be revoked if production migrates. U.S. Extends the Auto Parts “Offset” Program The White House has extended the tariff offset mechanism from a two-year rampdown to a five-year window (through 2030), allowing Tariff Engineering Legal Maneuver or Illegal Evasion? By Scali Rasmussen, with contributions from Halbert Rasmussen, Shareholder, and Eric P. Weiss, Principal
EPICBROKERS.COM ©2025 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, PLEASES CONTACT: Alison McCallum (949) 422-6431 alison.mccallum@epicbrokers.com 20 SAN DIEGO DEALER automakers that assemble and sell vehicles in the U.S. to apply a 3.75% MSRP-based credit that helps blunt 25% tariffs on imported parts; the program had been set to fall to ~2.5% and sunset. Related actions also formalized new 25% tariffs on imported medium and heavy-duty trucks and a 10% tariff on buses, with USMCA-qualifying truck imports exempted from those new truck duties. Does “U.S. production” include USMCA vehicles assembled in Canada or Mexico? No — the offset credit is tied to vehicles assembled in the United States under procedures published by the U.S. Department of Commerce. USMCA-eligible vehicles assembled in Canada or Mexico are handled under separate relief mechanisms that apply preferential treatment to qualifying North American content, including a process to isolate U.S. content when assessing certain tariffs; they do not count as “U.S. production” for the offset. KEY TAKEAWAYS • Tariff engineering remains legal when transparent and grounded in accurate classification at the time of import. • Policy tools can matter as much as design tweaks. Canada’s remission quotas show that relief can be conditioned and withdrawn based on domestic production commitments. • The U.S. offset extension (to 2030) buys time for supply chain adjustments, but it hinges on U.S. assembly; don’t assume USMCA-assembled vehicles qualify for that credit. • Importers and manufacturers should seek advance rulings and track agency guidance to avoid stacking errors or missed relief. (Commerce has issued detailed procedures for applying the offset and related programs.) Sources 1. Associated Press. (2025, October). Canada cuts tariff relief on some US cars due to Stellantis, GM ending some Canadian production. The Hill. 2. Bloomberg Law. (2025, October). Trump Extends Auto Tariff Relief, Imposes Truck and Bus Duties. 3. U.S. Department of Commerce. (2025, October). Department of Commerce announces new auto tariff offset process.
NCDA.COM 21 Uplift Your Employees by Promoting Back Injury Prevention Lifting objects is a necessary part of many jobs. However, it’s easy for employees to develop bad habits that can harm their backs and put them out of commission. Back injuries are one of the leading causes of disability for workers. Injuries can develop over time from long-term repetitive activity or result from a single mishap. MANAGEMENT’S ROLE IN BACK INJURY PREVENTION Your role as a business owner is essential in promoting back injury prevention at work. Encourage safe lifting techniques with these actions: • Create a Workplace Policy: This may include guidelines on proper lifting practices, supervision, team assistance, and using appropriate tools. • Conduct a Hazard Assessment: Identify lifting risks and work with employees to address them. • Host Regular Safety Meetings and Trainings: Discuss safe lifting practices on a frequent basis. • Provide Lifting Aids: Offer tools like adjustable carts and hoists for heavy items. TIPS FOR SAFE LIFTING Leading by example can create a safer workplace. Consider reviewing these lifting tips with your team: • Ensure there’s adequate space and a clear path around you. • Test the weight of each object and ask for help if it’s too heavy. • Bend your knees and use your legs to lift, not your lower back. • Keep the load close to your body. • Avoid twisting or stretching while carrying a load. • Use tools like dollies or hoists for heavier loads. BEYOND THE WORKPLACE Prioritizing back health doesn’t stop at work. Remind your employees to practice these techniques at home, where lifting tasks can also take a toll. Contact your local Federated Insurance representative today for more information on risk management. By Federated Insurance
WELCOME New Associate Member! PARKER INSURANCE Parker Insurance is a specialized employee benefits and consulting firm serving automotive dealerships and dealer groups nationwide. Founded by Brian Alexander, Parker Insurance partners with dealership leadership to design and manage health benefits strategies that balance cost control, compliance and employee satisfaction in an increasingly complex benefits landscape. With deep experience in the automotive industry, Parker Insurance understands the operational realities dealerships face, including multi-entity structures, variable workforce models and the pressure of rising healthcare costs. The firm works closely with dealer principals, CFOs and HR leaders to evaluate funding models, negotiate competitive health plans, and implement benefits solutions that attract and retain talent without sacrificing financial performance. Parker Insurance is differentiated by its hands-on advisory approach, proactive guidance throughout the year and high-touch service model. Clients benefit from expert attention, clear communication and strategic insight that extends well beyond annual renewals. By acting as a long-term partner rather than a transactional broker, Parker Insurance helps dealerships make confident, informed decisions about their employee benefits programs. For more information, visit www.parkerinsurancesd.com. NCDA.COM 23
Contact your dedicated NADA Retirement Director today Todd Adrian I 970-581-8633 I Todd.Adrian@empower.com As they do each fall, the IRS recently announced adjustments affecting the dollar limitations on 401(k) plans, IRAs, and other retirement-related items for tax year 2026. The changes from 2025 to 2026 are summarized below. The contribution limit for employees who participate in their 401(k) plan increased to $24,500, with the catch-up contribution limit increasing to $8,000 for employees age 50 and up. If you attain age 60 to 63 in 2026, you have a higher catch-up contribution limit of $11,250.* IRA contributions increased to $7,500, with a catch-up contribution limit of $1,100. For lower- and moderate-income employees, the income limit for the saver’s credit will increase to $80,500 for married couples filing jointly and $40,250 for singles. As a business owner and plan sponsor, you may find that a few key changes could impact your personal situation: • The Annual Compensation Limit affecting 401(k) plans has been increased to $360,000. • The Limitation for Defined Contribution Plans has been increased to $72,000. • The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase from $176,100 to $184,500. Description 2025 2026 Maximum Pretax 401(k) Contribution (not including catch-up contributions for participants age 50 and older) $23,500 $24,500 Catch-Up Contribution Limit (for participants age 50 and older) $7,500 $8,000 Annual Addition Dollar Limit (not including catch-up contributions for participants age 50 and older) $70,000 $72,000 Compensation Limit $350,000 $360,000 Compensation Limit for Highly Compensated Employees $160,000 $160,000 Compensation Limit for Key Employee Officers $230,000 $235,000 Social Security Wage Base $176,100 $184,500 FOR PLAN SPONSOR AND FINANCIAL PROFESSIONAL USE ONLY. *Beginning in 2026, if you are age 50 or older and earned more than $150,000 in the previous year, any catch-up contributions you choose to make must be made as Roth (after-tax) contributions as required by the SECURE 2.0 Act. Securities, when presented, are offered and/or distributed by Empower Financial Services, Inc., Member FINRA/SIPC. EFSI is an affiliate of Empower Retirement, LLC; Empower Funds, Inc.; and registered investment adviser Empower Advisory Group, LLC. This material is for informational purposes only and is not intended to provide investment, legal, or tax recommendations or advice. “EMPOWER” and all associated logos and product names are trademarks of Empower Annuity Insurance Company of America. ©2026 Empower Annuity Insurance Company of America. All rights reserved. NADA-FLY-WF-3761497-0126(5433900) RO5054554-1225 This was brought to you by the NADA Retirement Program from Empower, our partner for dealership 401(k) solutions. Empower provides service excellence, constant innovation, thought leadership and outstanding people to help plan sponsors and participants get involved in and help plan for their financial future. The National Automobile Dealers Association and Empower have created a unique relationship through which Empower offers flexible, competitive 401(k) plans with an awardwinning service model and support for your fiduciary responsibilities at a negotiated NADA member price. If you work with a local financial professional, be sure to ask them about the NADA Retirement Program or visit nadaretirement.com.
San Diego County New Retail Car and Light Truck Registrations Most Recent Two Months YTD thru Nov. YTD Market Share 10/24 & 11/24 10/25 & 11/25 % change YTD '24 YTD '25 % change YTD '24 YTD '25 change Industry Total 24,008 23,901 -0.4% 131,022 133,710 2.1% Cars 6,176 5,573 -9.8% 33,144 31,224 -5.8% 25.3 23.4 -1.9 Light Trucks 17,832 18,328 2.8% 97,878 102,486 4.7% 74.7 76.6 1.9 Percent Change in County Registrations by Manufacturer Percent Change in County and U.S. YTD 2025 thru Nov. vs. YTD 2024 New Retail Light Vehicle Markets YTD 2025 thru Nov. vs. YTD 2024 San Diego County Market Shares by Powertrain Type YTD 2024 and YTD 2025, thru November County 2.1% County 4.7% County -5.8% U.S. 3.9% U.S. 6.3% U.S. -6.9% TOTAL Trucks Cars 15.1% 11.2% 10.1% 9.6% 6.7% 4.5% 3.3% -1.0% -1.1% -1.5% -3.0% -7.8% -12.2% -16.4% 54.9% 23.0% 16.1% 3.9% 2.1% 50.4% 23.0% 20.8% 3.9% 1.9% Gasoline Electric (BEV) Hybrid Plug-in Hybrid (PHEV) Diesel YTD '24 YTD '25 San Diego Outlook Covering the San Diego County automotive market Data thru November 2025 Data Information Released by: New Car Dealers Association San Diego County Data sourced from Experian Automotive. Figures for November 2025 are partially estimated. Data presented in Auto Outlook measures new retail vehicle registrations in San Diego County. Monthly recording of registrations occurs when vehicle title information is processed, which may differ from date of sale. Title recording can occasionally be subject to processing delays by governmental agencies. For this reason, the year-to-date figures will typically be more reflective of market results. The graph above shows market share by type of powertrain. Hybrid vehicle market share excludes mild hybrids. Data sourced from Experian Automotive. The graph above compares the change in new retail car and light truck registrations in both the county and U.S. markets. Data sourced from Experian Automotive. The graph above shows the percent change in new car and light truck registrations by manufacturer during the first 11 months of this year versus the same period a year earlier. Data sourced from Experian Automotive. Note: MB is Mercedes-Benz. NCDA.COM 25
San Diego County New Retail Light Vehicle Registrations Registrations Market share YTD '24 thru Nov. YTD '25 thru Nov. % change YTD '24 thru Nov. YTD '25 thru Nov. Acura 659 875 33% 0.5% 0.7% Alfa Romeo 63 48 -24% 0.0% 0.0% Audi 2,045 2,095 2% 1.6% 1.6% BMW 4,916 5,041 3% 3.8% 3.8% Buick 249 241 -3% 0.2% 0.2% Cadillac 788 983 25% 0.6% 0.7% Chevrolet 7,362 7,952 8% 5.6% 5.9% Chrysler 218 162 -26% 0.2% 0.1% Dodge 459 215 -53% 0.4% 0.2% Ford 10,002 11,066 11% 7.6% 8.3% Genesis 425 452 6% 0.3% 0.3% GMC 1,908 2,120 11% 1.5% 1.6% Honda 14,773 14,392 -3% 11.3% 10.8% Hyundai 6,461 6,626 3% 4.9% 5.0% Ineos 147 98 -33% 0.1% 0.1% Infiniti 296 235 -21% 0.2% 0.2% Jeep 2,318 2,164 -7% 1.8% 1.6% Kia 6,968 7,395 6% 5.3% 5.5% Land Rover 1,093 1,233 13% 0.8% 0.9% Lexus 4,724 5,222 11% 3.6% 3.9% Lincoln 310 285 -8% 0.2% 0.2% Lucid 195 271 39% 0.1% 0.2% Mazda 3,269 3,489 7% 2.5% 2.6% Mercedes-Benz 3,974 4,575 15% 3.0% 3.4% MINI 346 396 14% 0.3% 0.3% Mitsubishi 137 164 20% 0.1% 0.1% Nissan 4,502 4,515 0% 3.4% 3.4% Polestar 190 106 -44% 0.1% 0.1% Porsche 1,004 1,046 4% 0.8% 0.8% Ram 1,129 1,084 -4% 0.9% 0.8% Rivian 1,079 1,143 6% 0.8% 0.9% Subaru 4,500 4,366 -3% 3.4% 3.3% Tesla 16,470 13,771 -16% 12.6% 10.3% Toyota 23,399 26,039 11% 17.9% 19.5% Volkswagen 2,997 2,434 -19% 2.3% 1.8% Volvo 951 1,016 7% 0.7% 0.8% Other 696 395 -43% 0.5% 0.3% 1.8 2.3 2.5 3.4 3.0 3.4 3.8 3.6 4.9 5.3 5.6 7.6 12.6 11.3 17.9 1.6 1.8 2.6 3.3 3.4 3.4 3.8 3.9 5.0 5.5 5.9 8.3 10.3 10.8 19.5 Jeep Volkswagen Mazda Subaru Mercedes-Benz Nissan BMW Lexus Hyundai Kia Chevrolet Ford Tesla Honda Toyota YTD '25 thru Nov. YTD '24 thru Nov. Audi 17.0% Ram 15.4% Hyundai 14.8% BMW 12.1% Kia 4.6% This report is sponsored by the New Car Dealers Association San Diego County (858-550-0080) and produced by Auto Outlook (610640-1233). Any material quoted must be attributed to San Diego Auto Outlook, published by Auto Outlook, Inc. on behalf of NCDA San Diego County. Data source must also be shown as “Data sourced from Experian Automotive.” Please contact the Association with any questions or comments regarding the publication. Copyright December 2025. San Diego Auto Outlook Data thru November 2025 County Market Share for Top 15 Selling Brands YTD ‘25 thru November vs. Year Earlier Top ten ranked brands in each percent change category are shaded gray. Data sourced from Experian Automotive. Brands On the Move Largest % increase in registrations during past 3 months (Sep ‘25 thru Nov ‘25) vs. preceding 3 months (Jun ‘25 thru Aug ‘25) Among top 20 selling brands in past three months 26 SAN DIEGO DEALER
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