2023-2024 SPECIAL LEGISLATIVE EDITION Franchised Dealers Are THE Critical Cog in the EV Marketplace Issue 1 2024 Official Publication of the New Jersey Coalition of Automotive Retailers
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©2024 New Jersey Coalition of Automotive Retailers | The newsLINK Group, LLC. All rights reserved. The New Jersey Auto Retailer is published four times each year by The newsLINK Group, LLC for the New Jersey Coalition of Automotive Retailers (NJCAR) and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and dealer education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of NJ CAR, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. The New Jersey Auto Retailer is a collective work, and as such, some articles are submitted by authors who are independent of NJ CAR. While NJ CAR encourages a first-print policy, 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. table of CONTENTS NJ CAR BOARD OF TRUSTEES BY REGION NORTHERN REGION I (Bergen, Essex, Hudson, Passaic, Sussex) Joseph Agresta, Jr. (Alt.) Timothy Allocca Jeffrey Brown John Fette Matthew Haiken (Alt.) William Kundert, Jr. Brian Lam Renee P. McGuire James Russomano (Alt.) Richard Selman Todd Van Duren NORTHERN REGION II (Hunterdon, Morris, Somerset, Union, Warren) Greg Ciocca, Jr. David Ferraez Chris Gilbert (Alt.) John Johnson, Jr. Sean Lyons Trent Miller (Alt.) Chris Preziosi, Jr. (Alt.) Edward J. Rossi Michael Salerno William L. Strauss, III Stephen Tilton Eric Nielsen ..................................................................................Chairman Ronald E. Baus, Jr. ................................................................Vice Chairman Andy Shapiro . ..............................................................................Secretary Ed Barlow, III ............................................................................... Treasurer Michael P. DeSilva .................. Regional Vice President (Northern Region I) Mark Montenero ....................Regional Vice President (Northern Region II) Richard Malouf, Jr. .......................Regional Vice President (Central Region) David Kull ................................Regional Vice President (Southern Region) James Curley, III ..............................................................Budget Chairman Michael McGuire .................................NJ CAR Insurance Co. Ltd. Chairman William L. Strauss, III ................................ NJ CAR Services, Inc. President Richard DeSilva, Jr. ........................................NADA Director for New Jersey Frank M. Pezzolla...............................................Truck Committee Chairman Charles S. Miller ............................................................CAR-PAC President Thomas DeFelice, lll .......................................................NextGen Chairman James B. Appleton ........................................................................President CENTRAL REGION (Middlesex, Monmouth, Ocean) Robert Ciasulli Lisa Ocasio Devivo Kevin DiPiano (Alt.) Garry Foltz Elizabeth Giglio Adam Kraushaar Veronica Maoli (Alt.) Paul Sansone, Jr. Anton Semprivivo Joseph Wajda (Alt.) Jordan Wright SOUTHERN REGION (Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, Salem) Russell Abate Jason Elkins Jeremy Fisher William Kassner (Alt.) Steven Kindle Judith Krupnick (Alt.) Stacey Lilliston James Magee (Alt.) Marcy Maguire James McCormick Robert D. McCormick Tina Wright 6 Franchised Dealers Are THE Critical Cog in the EV Marketplace BY JAMES CURLY, III 8 The Franchise System Benefits Consumers — The Direct Sales Model Does Not BY JAMES B. APPLETON 10 The California Advanced Clean Car II (ACCII) Rule Is Bad for New Jersey BY JAMES B. APPLETON 12 New NJMVC Power of Attorney and the Impact on Dealerships BY GREYSON HANNIGAN 14 5 Questions With... 16 Support New Jersey Consumers and Help NJ CAR Fight the Adoption of ACCII BY JAMES CURLEY, III 18 Ray Catena Named New Jersey’s 2024 TIME Dealer of the Year Award Winner 20 State and Federal Incentives Make Many EVs More Affordable BY JAMES CURLEY, III 22 NJ CAR Preparing Legislation to Strengthen Dealer Franchise Protections and Boost Recall Completion Rates BY JAMES B. APPLETON 25 Plug-In Vehicles Have a Role to Play in a 100% EV Future BY RICK DeSILVA, JR. 28 NJ CAR Recognizes Dealership Heroes on Social Media 34 New Jersey Franchised New Car & Truck Dealerships By Legislative District EDITOR: BRIAN HUGHES PUBLISHED BY THE NEWSLINK GROUP, LLC 855.747.4003 NJ CAR Executive Committee and Board of Trustees 2024 4 NEW JERSEY auto retailer
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Franchised dealers are ALL IN when it comes to offering a rapidly growing variety of electric vehicles (EVs) in every category and at every price point. Hundreds of billions of dollars have been invested in research and development, design, and standing up the manufacturing capacity to produce EVs in greater and greater numbers. Consumer demand for EVs is still light (about 7% of total New Jersey vehicle sales in 2022), but generous state and federal incentives should help the EV market share continue growing, notwithstanding concerns about the overly complicated federal tax credit or the “onagain, off-again” nature of the state incentive program. There is a great deal of upside and optimism among franchised dealers regarding the dealer EV marketplace. As is usually the case, this silver lining has a dark cloud hanging over it, with some OEMs considering or actually moving forward to spin off an EV-only line make. This has dealers very concerned. Take Polestar, which was originally a model in the Volvo lineup, that spun off as a new, standalone line make. While dealers were pleased to see Volvo appoint franchisees, new entrants to the EV market have chosen to go it alone, like Tesla. We’re not just talking about highvisibility brands like Rivian and Lucid. Vietnamese brand, VinFast, is setting up shop in the U.S. and others are sure to follow. Legacy brands are making noise as well. Ford CEO Jim Farly courted controversy with his comments last year about spinning off Ford EVs as a separate line make. It’s hard to determine whether this was an attempt to pump up the stock price or if he was serious about going down this road at the time. Ford ultimately decided to “separate,” but not spin off its EV business from its legacy operations. Volkswagen also announced plans to sell the new Scout EV brand online, directly from the factory, starting in 2026. Exactly how they plan to launch the Scout in the U.S., where most states prohibit direct sales, is a question that has not yet been answered. State franchise laws make it difficult for OEMs to bypass their incumbent dealer networks, but it’s important to note these laws were not intended to primarily protect dealers. They were aimed at protecting consumers by ensuring competition and accountability. It’s distressing to see some automakers STILL fail to grasp the fact that independently owned and operated dealers are the best way to market any new product, especially EVs. We need to remind our OEMs about this fact, considering the proclamations at the federal and state level, that every vehicle sold by 2035 will be an EV. Franchised dealers are a critical cog in the EV marketplace, but they are also caught in the middle of a tornado of ever-evolving activity. Government can mandate that manufacturers produce as many EVs as they want. Automakers can produce them as fast as supply chain conditions will allow. And these vehicles can flow down to dealer lots, but they do no good for the environment until customers purchase them. The consumer will decide when (or if) we become a 100% EV market, not politicians. And those consumers should benefit from the competition and protections afforded to them by the franchise system, not be forced to purchase their EV directly from a manufacturer (start-up or legacy) that has a monopoly on the entire car-buying process. Franchised Dealers Are THE Critical Cog in the EV Marketplace BY JAMES CURLY, III, 2023 CHAIRMAN, NJ CAR 6 NEW JERSEY auto retailer
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The Franchise System Benefits Consumers — The Direct Sales Model Does Not BY JAMES B. APPLETON, PRESIDENT, NJ CAR 8 NEW JERSEY auto retailer
The Direct Sales model is WRONG FOR CONSUMERS. New Jersey has been at the forefront of this fight for several years, but direct sales fights continue to rage all over the country, as you will see in our featured story from this issue of New Jersey Auto Retailer. Initially, it was just Tesla, but now Rivian, Lucid and other startups are taking up the mantle and trying to gain special consideration from Legislatures coast to coast. Even some legacy automakers are toying with the idea of breaking off their EV product into standalone companies. Direct sale advocates have long said franchised dealers are unwilling or unable to sell EVs and that EV startups with direct sales are the only ones giving consumers the convenience of online vehicle purchasing. Neither of these assertions are true. Franchised dealers currently offer more than 40 vehicles with a plug, and dozens more are coming in the next few years. They also offer the consumer flexibility to complete their retail purchase online if the consumer prefers a remote or digital experience. The network of 500+ franchised new car and truck dealerships in New Jersey represents a $34.6 billion industry and directly employs nearly 36,000 men and women, supporting an additional 34,000 jobs in the Garden State. Franchise dealerships provide consumers with fierce inter- and intra-brand price competition and prevent manufacturer monopolies. They offer ready access to warranty, recall and general repair service and generate good-paying, local jobs (many of which don’t require a college degree) that can’t be outsourced. They contribute billions of dollars in tax revenue and other benefits to the State and local economies. Factory-direct sales are simply an attempt to monopolize the electric vehicle (EV) market, eliminate competition and limit access to independent warranty and safety recall services. NJ CAR has been communicating this message through a variety of paid and earned media campaigns targeting New Jersey’s elected officials and the public at large for more than a year. NJ CAR staff and dozens of dealers have participated in more than 100 Zoom calls and in-person meetings over the past 14 months, meeting with virtually every legislator to ensure the industry’s message stays in front of the State’s decision-makers. We have been proactive in our efforts, rather than reactive, and we are committed to staying one step ahead of Tesla, Rivian, Lucid and the other advocates for direct sales, including some legacy automakers that have begun to explore the possibility of factory-direct sales of EVs and autonomous vehicles. Fisker and VinFast, two new entrants to the EV market who initially signaled they would follow Tesla’s direct sales model, have come to their senses and begun appointing franchisees. This not only benefits consumers and the communities in which the dealerships operate, but also benefits the manufacturers as well. It allows the manufacturers to spend their time and money designing and building the best possible vehicles and lets dealers do what they do best — sell the cars and trucks to their customers. Direct sales advocates have said the unique nature of this evolving technology requires a factory-to-consumer direct sale. The fact is vehicles have been evolving for more than a century, and there is absolutely no reason to abandon the franchise system that has served consumers AND auto manufacturers well for all that time. Consumers want convenient access to service. They want a strong local business that employs their neighbors and is active in the community. They want hearty competition on pricing for sales and service. The franchise system meets those needs. The direct sales model does not. FRANCHISE DEALERSHIPS PROVIDE CONSUMERS WITH FIERCE INTER- AND INTRA-BRAND PRICE COMPETITION AND PREVENT MANUFACTURER MONOPOLIES. THEY OFFER READY ACCESS TO WARRANTY, RECALL AND GENERAL REPAIR SERVICE AND GENERATE GOODPAYING, LOCAL JOBS (MANY OF WHICH DON’T REQUIRE A COLLEGE DEGREE) THAT CAN’T BE OUTSOURCED. 9 NEW JERSEY auto retailer
We’ve said it a million times; New Jersey’s neighborhood new car and truck dealerships are ALL-IN when it comes to selling and servicing EVs, and they want to sell what consumers want to buy. Both the Biden and Murphy Administrations have announced very aggressive EV goals over the next decade. It’s not a question of IF New Jersey will transition to a zero-emission transportation future. It’s only a question of WHEN. That is the heart of the debate among EV stakeholders on the best path forward for New Jersey to reach our shared goal of a 100% EV future. The New Jersey Department of Environmental Protection wants to adopt the California Advanced Clean Car II (ACCII) Rule as the primary mechanism for us to reach our EV goals. NJ CAR believes that blindly adopting ACCII will create unintended consequences that will hurt New Jersey consumers and make it MORE difficult to reach our EV goals, NOT easier. Adopting ACCII will hurt consumers by negatively impacting two of the most important elements of a vehicle purchase — affordability and choice. It’s simple math, consumers will be forced to hold on to their older, less environmentally-friendly vehicles when they can’t afford the mandated vehicles or those vehicle choices don’t meet their specific needs. ACCII could result in fewer vehicles being allocated to the State, as well as a limitation on base model vehicles in order for manufacturers to maximize profit on the vehicles they will be allowed to deliver for sale to ACCII states. New Jersey consumers lose because tighter inventories result in higher prices and/or less availability in the marketplace of base model vehicles. ACCII would also severely limit consumer choice on ALL types of vehicles, as not all automakers will produce all popular makes and models as ZEVs. Consumers’ shopping choices are further limited by ACCII’s lack of support for ALL hybrid vehicle options. Realistically, 100% EV sales in New Jersey will only occur when one of two things happen — all automakers build ONLY EVs, which is not the case so far since automakers want to continue to offer what consumers want to buy OR all consumers want to buy ONLY EVs, which has not happened anywhere. Consumers want options, and they will decide when we reach 100% EVs, not the government. BY JAMES B. APPLETON, PRESIDENT, NJ CAR The California Advanced Clean Car II (ACCII) Rule Is Bad for New Jersey 10 NEW JERSEY auto retailer
New Jersey needs to be realistic and plan a viable path to reach its EV goals. ACCII requires EV sales to reach 35% by 2026, increasing at a substantial rate until reaching 100% in 2035. That’s a 26% increase in EV sales over the next three years when it took nearly a decade for New Jersey to reach 9% EV sales. New Jersey can’t arbitrarily pick an EV sales percentage and assign it a date. It’s not a choice between ACCII and nothing. It’s a choice between an unrealistic ACCII and the Biden Administration’s significantly more stringent EPA Clean Car Rule that was recently proposed. The EPA rule gives New Jersey a viable alternative path to compliance that doesn’t harm consumers. Specific EV sales percentages aren’t mandated by the EPA’s proposed rule, but it does force automakers to produce more EVs. By comparison, ACCII locks New Jersey into a rule built for the California EV market and creates a wide variety of unintended headaches and obstacles for consumers, dealers and manufacturers. NJ CAR has encouraged the New Jersey Department of Environmental Protection (NJDEP) to review ALL options and conduct a cost/benefit analysis on each option before making a decision that will hurt New Jersey consumers and the $40 billion auto retailing industry that is a key driver of the Garden State economy. 11 NEW JERSEY auto retailer
Effective October 30, 2023 (extended from September 15, 2023), dealerships must conform to New Powers of Attorney (POAs), Odometer Disclosure Statement, and new rules for General and Limited POAs announced by the New Jersey Motor Vehicle Commission (NJMVC). NJ CAR has hosted several webinars and produced both a comprehensive FAQ document and a Quick Reference Guide. All of these materials are accessible under the News section of the NJ CAR website (www.njcar.org). Below are some of the highlights regarding the biggest NJMVC change to POAs in more than 25 years: • NJMVC requires a new Non-Secure POA to be used if dealerships choose to use electronic signatures on POAs. Additionally, the NJMVC requires a Secure POA to be used when the title is either lost or held by a lienholder (i.e., the classic trade situation). • Dealerships who do not wish to implement the new Non-Secure POA to be used with electronic signatures may continue to use a General or Limited POA that can be on Dealer Letterhead. However, these POAs must now be notarized. • Whether a dealership implements the new Non-Secure POA or continues to use their current General or Limited POAs, they must also supply an Odometer Disclosure Statement that can either be electronically signed or wet signed. • While the forms are effective immediately, dealers can utilize the grace period until October 30, 2023, to familiarize themselves with the forms and upload the Non-Secure POA and Odometer Disclosure Statement in their systems to be e-signed. • NJMVC considers the period before 10/30/23 as a phase-in period. Dealerships must be implementing the new POAs starting NOW. This means that any motor vehicle transaction submitted after 10/30/23 (for sales that occurred before 10/30/23) must use the new POAs. • After 10/30/23, all transactions for SALES OCCURRING PRIOR TO 10/30/23 submitted to local NJMVC Agencies or NJ CAR for processing must conform to the new POAs and new rules for Dealer POAs or they will be REJECTED. • If these MV transactions are submitted to local NJMVC Agencies or NJ CAR before 10/30/23 for processing, they can use current POAs or the new POAs. We strongly suggest that dealerships should not wait to implement these new POAs and new rules. DEALER POAS To be used during regular purchases or trades — with title in hand for signing documents, (including the title and registration on behalf of the customer) — dealerships can continue to use this POA. It must be notarized and have a Notary Commission Expiration date. The Notary cannot sign for the dealership. The POA must have the following in order to be notarized: • The owner(s) address. • The address of the dealership (if not on Dealership Letterhead). • Must be accompanied by an Odometer Disclosure Statement. ° May list more than one (1) dealership representative. If you have an MCO, NJ Title, Out-of-State Title with a New Jersey Reassignment that is not being signed by the customer as a buyer, a notarized dealership POA (signed by the customer) appointing a dealership representative may be used. If you have a trade title (New Jersey or Out-of-State Title) that is not being signed by the customer as a seller, a Notarized Dealership POA (signed by the customer) appointing the Dealership Representative may be used. Non-Secure POA (NSPOA) NSPOAs must be used with Electronic Signatures. The NSPOA is not mandatory and cannot be forced on a customer. The NSPOA accomplishes everything the Limited, General, or Dealer POA is used for. It can be used for purchases only, never a trade. It New NJMVC Power of Attorney and the Impact on Dealerships BY GREYSON HANNIGAN, DIRECTOR OF LEGAL AND REGULATORY AFFAIRS, NJ CAR 12 NEW JERSEY auto retailer
does not require a notary, but it must be filled out digitally on a computer, or in the DMS, and must be accompanied by an Odometer Disclosure Statement. The user may list more than one (1) Dealership Representative, but it must be accompanied by a Certificate of Completion for all signatures. If you have a New Jersey or Out-of-State Title with a New Jersey Reassignment or MCO that is not being signed by the customer as a buyer, a Non-Secure POA that is digitally completed and electronically signed by the customer, certifying the Dealer Representative, may be used. The NSPOA must include a Certificate of Completion for all signatures. SECURE POA (SPOA) The SPOA is used only when a Title is lost or held by a lienholder and is mandatory. A separate Odometer Disclosure Statement is not needed and does not require a notary, but it must be filled out digitally, printed, and wet-signed. The SPOA must contain the following three (3) security features: • A star at the top left over NJMVC. • A Vehicle Identification Number (VIN). • Watermark Signatures. Part A is filled out by the person trading in the vehicle. Part B is filled out by a new customer when the dealership is awaiting the title. Part C is always filled out. If a dealership takes a vehicle in trade, the title is then held by the bank while awaiting a payoff and release of the title. If the dealership does not have the title in hand to be signed by both the buyer and seller, then Parts A and C must be completed. If the vehicle described previously, which had been taken in trade, is subsequently sold before the dealership has received the title from the bank, the purchaser of the vehicle must complete Part B. This confirms the true mileage at the time they purchased the vehicle. Parts A, B, and C are then submitted. Odometer Disclosure Statement (OS-SS-2) The Odometer Disclosure Statement is used to state the total mileage upon the transfer of ownership. It is required to be submitted with the Dealer POA, NSPOA — if implemented — and a Leasing POA, unless an exemption applies. It is not required to be filed with a Secure POA, but a separate Odometer Disclosure Statement must be submitted for each Lease or Fleet transaction. The Odometer Disclosure Statement must be signed by both the buyer and the seller. It cannot be signed using a POA. The statement can be electronically signed, but must be done so with an accompanying Certificate of Completion. If it is used for Mileage Corrections, it must be wet-signed and notarized. Only the primary owner is required to sign; a co-owner’s signature is not necessary. If the source document is a New Jersey, Out-of-State Title, or MCO, the Title will be flipped into the purchasing customer’s name, and the dealership should use a POA to sign the title documents on behalf of the purchaser, then the purchaser must sign a separate Odometer Disclosure Statement. You cannot use a POA to sign for the customer. Alternatively, on a Lease, the lessee must sign the Odometer Disclosure Statement. Greyson Hannigan is NJ CAR’s Director of Legal and Regulatory Affairs. He can be reached at (609) 883-5056, x340 or via email at ghannigan@njcar.org. 13 NEW JERSEY auto retailer
1) What inspired you to run for office and become a legislator? I came to this country with my parents when I was six years old. I worked hard to learn the language, excel in my studies and eventually graduate from law school. I know I had the quintessential American dream, but I also know that dream is becoming harder and harder to capture. I got into politics to serve the community and the country that has given me so much. 2) What is your greatest achievement and greatest disappointment as a legislator? If you could change one thing in Trenton, what would it be? This is a big question for a freshman legislator, but I would say my greatest achievement has been getting my Lunar New Year Resolution through the Assembly, and I look forward to getting it through the Senate in the coming months. I don’t know that I see anything as a disappointment quite yet. I see obstacles as learning opportunities. I am still learning the ins and outs, so whenever I hit a roadblock, I learn more about the legislature, our role, our relationship with the administration, the advocates, and how it all works together. Again, it isn’t easy, but it’s the business of getting things done on the state level. One thing I would improve in Trenton if I had a magic wand — and I think we are moving in the right direction, especially in the last election cycle — is increasing diversity. Not just the diversity of color, but the diversity of gender, creed, and class to make sure that diversity is reflected at the decision-making table. Again, I think we are really improving, especially here in District 37, but that’s one thing I think we could still use some movement on. 3) What are the legislative priorities, issues, or areas of concern you would like to focus your attention on? I want to bring our state and local levels into the 21st century. Right now, we are operating on computer systems from the 1980’s. We need to improve the way we communicate and interact with the public. There is no excuse for this, especially when it comes to systems people rely on for food, heat, and housing. 4) Coming out of the pandemic, what are the lessons you’ve learned, and how do you think those lessons should guide public policymakers going forward? First, we must have the systems New Jerseyans need in times of crisis working in a way that makes them easy to use, understand and access. That is urgent, and we can’t wait for the next pandemic to make these changes. Second, on a state and national level, we have to have a better way to combat misinformation. For me, the clearest thing that came out of the pandemic was how connected we truly are, meaning we are only as safe as our most vulnerable neighbors and are only as informed as our least informed communities. So, we cannot ignore, silo, or isolate anybody or group because, whether we like it or not, we are all in this together. 5) What was the make and model of the vehicle you learned how to drive in? What was the first vehicle you owned, new or used? My first car was a Nissan 240SX that I had in my senior year of high school. I loved that car. We drove it everywhere from Queens to Canada and down to Virginia Beach, too. ASSEMBLYWOMAN ELLEN PARK 37th Legislative District 5 questions with... 14 NEW JERSEY auto retailer
1) What inspired you to run for office and become a legislator? I was inspired to run for office by my former boss and mentor, Honorable Joseph Roberts, who served as the Assembly Speaker from 2007-2010. 2) What is your greatest achievement and greatest disappointment as a legislator? My greatest achievement, without a doubt, is championing New Jersey’s environmental justice law, which is serving as a model for the nation. This law ensures that no one community bears a greater environmental burden than benefit. SENATOR TROY SINGLETON 7th Legislative District My greatest disappointment is not getting Lisa’s Law passed. This bill would have helped protect victims of domestic violence by allowing courts to order electronic monitoring of certain offenders. 3) What are the legislative priorities, issues, or areas of concern you would like to focus your attention on? As Chairman of the Community and Urban Affairs Committee, housing affordability and accessibility are ongoing priorities for me. Additionally, policies that ensure that economic growth is equitable. 4) If you could change one thing in Trenton, what would it be? If I could change anything in Trenton, it would be the pace at which we do things. We don’t allow enough time for big ideas to be fully developed. 5) What was the make and model of the vehicle you learned how to drive in? What was the first vehicle you owned, new or used? I learned to drive in a Plymouth Horizon. The first car I owned was a Nissan Altima. 22 Florence Street • South Hackensack, NJ 07606 • Learn more at WASCOonline.com • 800-732-4511 Why Should Your Dealership Partner With WASCO? Dealership Supplies & Exceptional Customer Service WASCO helps me manage a very diverse, very difficult business. Interacting with many vendors on my behalf really helps me simplify the entire process. — Ed Rossi, Rossi Chevrolet Buick GMC “ ” VOLUME PRICING DISCOUNTS PURCHASING EFFICIENCY ANNUAL DIVIDEND 15 NEW JERSEY auto retailer
My tenure as NJ CAR Chairman ran through the end of 2023. Time really does fly when you’re having fun … if you call “dealing with all of the legal, legislative and public affairs challenges the car business faced this past year” fun. We can all agree that 2023 was a great year in the car business for dealers and manufacturers, but we can also see the challenges that lie ahead. There are signs that inventories are starting to grow, and incentives are creeping back into the market as new car prices rise. Consumers are starting to pump the brakes, and dealers are concerned that we are headed to a market in which working- and middle-class families simply won’t be able to afford a new car or truck. Meanwhile, state and federal government officials are hell-bent on transforming the retail automobile market to an all-electric vehicle market in a little more than a decade. And the OEMs seem ready to comply, regardless of what consumers want. NJ CAR has launched an aggressive grassroots campaign to mobilize dealership employees to write and email their state legislators to urge them to tell the New Jersey Department of Environmental Protection (DEP) to reconsider its adoption of California’s Advanced Clean Car II (ACCII) rule. We have already generated thousands of email contacts to legislative offices, and many legislators on both sides of the political aisle have reached out to DEP and the Governor’s Office to question this radical public policy initiative. We have a second campaign targeting Governor Murphy himself that has already generated hundreds of responses. NJ CAR has urged the DEP — and we have asked our friends and supporters in the Legislature to urge the DEP — NOT to adopt ACCII. Rather, we have asked the DEP to go back to the drawing board and compare the costs and benefits of adopting ACCII versus allowing New Jersey to revert to the federal clean car program. The Biden Administration recently proposed a massive overhaul of the federal clean car program that is nearly as stringent as ACCII but which allows OEMs, dealers, and consumers more choice and greater flexibility on how to meet the requirements. The sad fact is DEP never even studied the new federal plan or analyzed whether it would be better for New Jersey. We have serious concerns about whether the proposed regulations square with the New Jersey Clean Car law. We also question whether unelected public officials ought to be making such consequential decisions affecting New Jersey’s $40 billion per year auto retail sector. Common sense and good governance would suggest that big decisions like this should be made by the elected members of the New Jersey Legislature, not a lame-duck governor or his political appointees. The regulations published in late August 2023 were subject to a 60-day public comment period that ran through late October. The Governor’s plan was to have these regulations in place before the end of the year, which would have put us on track to be a 35% EV market by 2027. These percentages ramp up quickly to 100% by 2035. I don’t think there is anyone in this room that believed that was a realistic time frame. How about we get to a 20% or 30% EV market before we start talking about 100%? Simply put, New Jersey will be a 100% EV market when consumers say they want it, not when government officials mandate it. NJ CAR is working hard to persuade the DEP to back off, and if they don’t, we’re asking the legislature to take the wheel and steer EV policy back onto the right road. Every dealer should be asking every one of their employees to contact their local legislators to have them ask the DEP to rethink the adoption of ACCII. The Coalition has made it incredibly easy with the creation of the NJ CARPOOL grassroots political action network. If you haven’t already done so, contact Anne Smith at asmith@njcar.org, and she’ll take care of enrolling your employees in the network. I also encourage every dealer to contribute as much as they are comfortable (and legally allowed) to CAR-PAC, NJ CAR’s political action committee. The money we raise for CAR-PAC goes to support candidates for the State Assembly and Senate who will eventually — one way or the other — have the final say on EV policy in this state. Support New Jersey Consumers and Help NJ CAR Fight the Adoption of ACCII BY JAMES CURLEY, III, 2023 CHAIRMAN, NJ CAR 16 NEW JERSEY auto retailer
Ray Catena Named New Jersey’s 2024 TIME Dealer of the Year Award Winner Nationally Recognized for Community Service and Industry Accomplishments 18 NEW JERSEY auto retailer
Ray Catena, President of Ray Catena Motor Car Corporation, was recently selected as New Jersey’s 2024 TIME Dealer of the Year (TDOY) award winner. Ray was recognized for his exceptional industry accomplishments, as well as his commitment to community service. He was honored at the 107th annual National Automobile Dealers Association (NADA) Show in Las Vegas, Nevada, on February 3, 2024. The TIME Dealer of the Year award is one of the automobile industry’s most prestigious and highly coveted honors. Ray was one of 49 auto dealers nominated for the 55th annual award from more than 16,000 nationwide. Ray is a born entrepreneur who learned the value of a hard day’s work from his grandparents, who raised him. In grammar school, he would collect spare parts to repair and resell bicycles. At age 12, he bought his first car and sold it for a profit. “From that point on, I was hooked and knew the automotive business was my destiny,” said Ray. “The work ethic and integrity my grandparents instilled in me have served me well throughout my automotive career.” His career officially started in 1958, when he opened Towne Auto Sales, a retail used car and wholesale operation in Kearny, at the age of 22. Ray spent the next 18 years honing his knowledge of the automotive industry, which prepared him to move into new-car sales with Ray Catena Chevrolet in Fair Lawn, New Jersey, in 1976. Ray’s wife, Elsie, has worked beside him from the beginning of his career and continues to do so to this day. While his company has grown substantially since 1976, Catena is proud of his reputation for excellent customer service. His motto has always remained the same: “If you think something is more important than the customer, think again.” Ray is one of the most accomplished and respected dealers to ever represent New Jersey in the competition. His success is the result of his commitment to his customers, his manufacturers, the communities in which his dealerships operate, and his employees. Founded in 1981, the Ray Catena Auto Group has grown to employ more than 1,100 people, representing luxury brands Mercedes-Benz (three dealerships), Sprinter, Porsche, Infiniti, Lexus (four dealerships) Land Rover (two dealerships), Audi, BMW, Jaguar, and MINI throughout New Jersey and New York. One of Catena’s daughters, a son-in-law, and two grandsons are the next generations representing the family’s enterprise. Ray feels it is his responsibility, as a successful businessperson, to give back to his employees, his customers, and the communities his dealerships serve. To that end, he supports a wide variety of charitable causes, including the Tunnel to Towers Foundation; the Wounded Warrior Project; the Monmouth Conservation Foundation; the Susan G. Komen Foundation; the Monmouth Park Charity Fund; the Hackensack Meridian Riverview Medical Center; the Memorial Sloan Kettering Cancer Center; the New York-Presbyterian Columbia Medical Center; St. Jude Children’s Research Hospital; Fulfill Food Bank of Monmouth & Ocean Counties; Mercy Center; the Raine Foundation; Special Olympics of New Jersey; the Tigger Stavola Foundation for mental illness & addiction support; as well as an array of local youth sports teams, in addition to police, fire, and first aid squads throughout New Jersey and many other worthwhile causes. Ray is also proud to partner with Brookdale Community College and Universal Technical Institute on the vocational “School to Career Path” for automotive technicians, a program that provides the opportunity for paid internships, working side-by-side with master technicians and bridging the gap between theory and practice. HIS SUCCESS IS THE RESULT OF HIS COMMITMENT TO HIS CUSTOMERS, HIS MANUFACTURERS, THE COMMUNITIES IN WHICH HIS DEALERSHIPS OPERATE, AND HIS EMPLOYEES. 19 NEW JERSEY auto retailer
State and Federal Incentives Make Many EVs More Affordable BY JAMES CURLEY, III, 2023 CHAIRMAN, NJ CAR NJ CAR has been educating dealers for months about the proposed federal and state electric vehicle mandates aimed at dramatically increasing the number of EVs on the road. Dealers are “all-in” on EVs, but the Coalition has cautioned Governor Murphy and the New Jersey Department of Environmental Protection (NJDEP) to take a more realistic approach to achieving a 100% EV future. Consumers want choice and don’t appreciate being told what they can and cannot buy. EV mandates, like the Governor’s mandate to have 35% EVs sold in New Jersey by 2027 and 100% EVs sold in New Jersey by 2035, are going to backfire. EVs currently account for less than 10% of all vehicles sold. It’s unrealistic to assign an arbitrary percentage to a year without any consideration for consumer interest and electric charging infrastructure and readiness. Consumers will decide when New Jersey becomes a 100% EV state, not government decision-makers. The government can’t (and shouldn’t) force consumers into an EV, but the government can (and should) incentivize consumers to transition to an EV. The following is a recap of the various state and federal government programs that aim to make EVs more affordable for consumers. CHARGE UP NEW JERSEY EV INCENTIVE PROGRAM New Jersey recently wrapped up the third year of the Charge Up New Jersey EV Incentive Program. The $300 million, 10-year Program provides $30 million per year to incentivize consumers to purchase EVs. Below are some of the eligibility requirements to qualify for a Charge Up New Jersey incentive: • Eligible vehicles with an MSRP below $45,000 are eligible for a maximum incentive of $4,000. Eligible vehicles with an MSRP between $45,001 and $55,000 are eligible for a maximum incentive of $1,500. EVs with an MSRP over $55,000 are not eligible. • Buyer must be a resident of New Jersey at the time of vehicle order, purchase or lease and must remain a resident for at least two (2) years following the purchase. • The Program is limited to individuals only. • Only vehicle transactions occurring after the official launch and before the official closing of the current year’s Program are eligible for an incentive. 20 NEW JERSEY auto retailer
• A vehicle ordered, purchased, or leased, and/or delivered outof-state, is not eligible for the incentive. Any vehicle ordered online must be delivered in New Jersey to qualify. • Purchasers agree to retain ownership, or an active lease agreement, and registration of the vehicle in New Jersey for a minimum of 36 consecutive months. For more information on the program or to view a list of eligible vehicles, visit https://chargeup.njcleanenergy.com. EXEMPTION FROM NEW JERSEY SALES TAX The New Jersey Legislature exempts residents from paying State sales tax on the purchase or lease of a zero-emissions vehicle. With the current sales tax rate at 6.625%, this is a significant incentive that offers hundreds to thousands of dollars off the vehicle cost — at the point of purchase. To apply this incentive, the customer must fill out a Sales Tax Exempt Use Certificate (Form ST-4). Visit the NJDEP’s Drive Green website (https://dep.nj.gov/drivegreen/sales-and-use-tax-exemption) to view a list of vehicles eligible for the sales tax exemption. FEDERAL TAX CREDIT The Inflation Reduction Act of 2022 changed the rules for tax credits on eligible battery and plug-in hybrid electric vehicles. Under the new rules, the purchaser is not required to reach a minimum tax liability to secure a federal tax credit. However, the federal EV tax credit amount is affected by the individual’s tax liability and other factors. For example, if an individual purchases an EV eligible for the maximum $7,500 tax credit but owes only $4,000 in THE GOVERNMENT CAN’T (AND SHOULDN’T) FORCE CONSUMERS INTO AN EV, BUT THE GOVERNMENT CAN (AND SHOULD) INCENTIVIZE CONSUMERS TO TRANSITION TO AN EV. taxes, they will receive a $3,500 credit. Once a manufacturer sells 200,000 eligible plug-in electric vehicles, the available federal tax credit begins to phase out. To qualify, the eligible vehicle must be bought for personal use, NOT for resale, and the buyer’s modified adjusted gross income (AGI) may not exceed $300,000 for married couples filing jointly, $225,000 for heads of households, or $150,000 for all other filers. The amount of the credit depends on when you placed the vehicle in service (took delivery), regardless of purchase date and other factors. For more details regarding vehicle eligibility, purchaser eligibility and how tax credit amounts are determined, visit https://fueleconomy.gov/feg/tax2023.shtml. Beginning in January 2024, the tax credit can now be implemented at the point of sale, with dealers applying for reimbursement from the IRS, which has said it will pay dealers within three days of application. For more details on the federal EV tax credit, visit https://fueleconomy.gov/feg/tax2023.shtml. ArentFox Schiff’s Automotive Group drives innovative strategies forward. Our cutting-edge, national practice advises automotive leaders as the industry faces a dizzying array of competitive and regulatory hurdles. Smart in Automotive Smart In Your World afslaw.com Key Contact: Michael P. McMahan Partner, NY 212.484.3982 Michael.McMahan@afslaw.com 21 NEW JERSEY auto retailer
New Jersey already has one of the nation’s strongest Franchise Practices laws. That doesn’t mean there aren’t improvements that can be made to ensure New Jersey’s franchised new car and truck dealerships are protected from any potential manufacturer overreach. The New Jersey Franchise Practices Act was first passed in 1971 and has been amended several times over the past 52 years. NJ CAR is preparing legislation that would address several outstanding issues impacting dealers. The legislation would be aimed at protecting dealerships AND consumers by ensuring dealers are able to continue providing price competition for sale and service, as well as ready access to warranty and recall repair services to promote highway safety. The proposal grew out of a year-long discussion with the Executive Committee and the NJ CAR Franchise Practices Act Committee, which identified a number of franchise and recallrelated issues that required attention. NJ CAR began discussing the issue recently with Legislative Leaders and potential bill sponsors, who have expressed support for legislation would boost recall completion rates in New Jersey, improve highway safety, and foster competition in the new car and used car marketplace. The amendments NJ CAR has prepared will address a variety of issues important to dealers and consumers: • Prohibits the sale of unsafe used vehicles under a “stop sale” or “do not drive” recall. • Requires all used car dealers to check the National Highway Traffic Safety Administration (NHTSA) website (safercar.gov) for open recalls on a vehicle before it is sold. • Codifies the existing requirement for dealers to disclose whether a vehicle is subject to any open recall at the time of sale. • Provides a “safe harbor” defense to any consumer fraud claim, as long as the dealer checked the NHTSA website (safercar.gov) and found no recall on the vehicle before it was sold. The amendment also makes clear the dealer is not liable for any errors or omissions on the safercar.gov website and has no obligation to continue checking the website after the sale. NJ CAR Preparing Legislation to Strengthen Dealer Franchise Protections and Boost Recall Completion Rates BY JAMES B. APPLETON, PRESIDENT, NJ CAR continued on page 24 22 NEW JERSEY auto retailer
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• Requires automakers to provide the New Jersey Motor Vehicle Commission (NJMVC) with a list of all New Jersey-registered vehicles under recall for six (6) months or more (that have yet to be repaired) and, in cooperation with the NJMVC, to send notice to those registered vehicle owners with unresolved recalls. • Requires automakers to compensate their franchisees for specified costs associated with a “stop sale” or “do not drive” order. • Defines the dealers’ recall costs more clearly and requires automakers to compensate dealers 1.75% per month of the book value of any used vehicle subject to a stop-sale recall. • Clarifies provisions in existing law, which require an automaker to pay dealers a fair retail rate of reimbursement on parts and labor to repair vehicles under recall. • Protects auto retailers from being subject to financial or other penalties levied by an automaker in the event they bring a claim for reimbursement of recall costs. • Prohibits manufacturers from recovering their cost of compliance with state law and requires retail reimbursement to the dealer for parts and services provided for warranty and safety recalls. • Prohibits manufacturers from arbitrarily and unilaterally reducing the retail price of parts required for warranty and safety recall services immediately preceding or during a recall campaign to avoid paying dealers fair compensation for warranty and safety recall work. The amendments also address an issue that is at the heart of the complicated franchisor/franchisee relationship. Franchisees are often reluctant to challenge their franchisors, even when the franchisor violates the provisions of the Franchised Practices Act (and the dealerships’ rights), because litigation is too expensive or they fear retaliation. NJ CAR IS PREPARING LEGISLATION THAT WOULD ADDRESS SEVERAL OUTSTANDING ISSUES IMPACTING DEALERS. In these situations, dealers often turn to their advocates, like NJ CAR, to file legal challenges that individual dealers cannot file on their own. Unfortunately, two recent lawsuits brought by NJ CAR, on behalf of its Lincoln and Mazda dealers, were dismissed after a trial court found the statute doesn’t explicitly grant standing to sue for relief under the law to anyone other than an actual franchisee. The proposed amendment to the Franchise Practices Act would specifically grant standing to sue for a trade association that meets the U.S. Supreme Court criteria for associational standing. We focus on your energy strategy so yo focus on what matters most - your cust Create customized energy plans Achieve budget certainty Lock in low rates Natural Gas | Electricity pjagodzinski@spragueenergy.com Peter Jagodzinski | 732-440-0038 For over a decade, Sprague has been the exclusive energy partner for NJ CAR Sprague works with NJ CAR members to: Call Today Visit us online at spragueenergy.com/njcar continued from page 22 24 NEW JERSEY auto retailer
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