agreements and GAP protection, are important to many consumers. Moreover, charges for voluntary protection policies are not fees. However, dealers must be careful about other types of “creative” fees. Typically, state laws permit a dealer to charge a voluntary documentary or processing fee (however it may be labeled under state law) and a pass-through of electronic titling fees. Additional fees may be a problem. The most clear examples are commission fees or used car reconditioning fees added to the advertised price of a used vehicle. Those fees cannot be disclosed separately from the price of a vehicle. Charging any fees not expressly permitted by state law in addition to the advertised price is considered a bait and switch practice by the FTC, and it may violate state law on permissible fees. Use a Fair Credit Policy The fairness of pricing vehicle financing has been criticized for years. To deal with the criticisms, the NADA has developed a template program for fair credit. It requires a dealer to establish a standard starting point above buy rates for all customers, with downward deviations for non-discriminatory factors. If you have not adopted a policy, or if you adopted one and you no longer police it carefully, it is time to energize your fair credit compliance efforts. Adopt a policy and enforce it. Establish a Policy for Sale of VPPs Like criticisms over the terms of credit, proponents of stronger regulation of dealer practices have criticized VPP sales practices. To address the criticisms, NADA, along with NAMAD and AIADA, developed a template program for the sale of voluntary protection products. Use the NADA/NAMAD/AIADA program to protect against charges of discrimination in the sale of VPPs. Adopt a policy and enforce it. The FTC already views VPPs as “junk fees,” thus, having a standard policy and enforcing it is necessary. Be Sure Deals Are Neat and Complete You have a form package for a transaction with a consumer for a reason. The forms are required by state or federal law, or by best practice to protect your dealership. The forms do not work unless they are used properly. Be sure personnel finalizing transactions understand the need for all documents to be completed. Use a deal completion checklist. Periodically audit deals to be sure that all forms are being completed. Make sure your forms are up to date to address current laws. You should seek legal advice on the disclosure requirements and form review. OPERATIONS ISSUES Employee Issues Personnel lawsuits in the automotive industry have become big business for plaintiff’s firms, and 2026 will be no different. Dealers need to take proactive steps to lessen the chance of lawsuits. Do you have an employee handbook? Is it signed? When was it last updated? How are complaints handled? Make sure all employees who need licensing have licensing. Document personnel files with disciplinary actions and unsatisfactory performance issues. Attention to detail will go a long way when it comes to employee issues. Spot Delivery A dealer that enjoys spot delivery protection under state law should carefully follow the law. If there is no state statute, a dealer should avoid the practices that can lead to criticism. 1. Use a clear and understandable disclosure of the conditional nature of the spot delivery. If your state requires certain spot delivery language or agreements, such as in Virginia (on the buyer’s order) and Maryland (separate form with certain language required), your state requirements should be the only spot delivery language or documents in the deal. 2. If the vehicle is retaken, return the trade and the down payment. 3. Do not charge for use of the vehicle while it was in the hands of the customer. 4. Retake vehicles in strict compliance with the law. Give Attention to Cybersecurity In 2024, dealers were faced with the CDK breach. In 2025, dealers were faced with the 700Credit breach. Hopefully, things don’t come in threes, and 2026 is spared. However, it’s imperative that dealers remember Continued on page 11 vada.com 9
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