PUB. 5 2024 ISSUE 2 THE OFFICIAL PUBLICATION OF THE VIRGINIA AUTOMOBILE DEALERS ASSOCIATION Why Transparency Is the Name of the Game
© 2024 Virginia Automobile Dealers Association (VADA) |The newsLINK Group, LLC. All rights reserved. Virginia Auto Dealer is published four times each year by The newsLINK Group, LLC for VADA and is the official publication for the association. The information contained in this publication is intended to provide general information for review and consideration. 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 specific circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the association, 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. Virginia Auto Dealer is a collective work, and as such, some articles are submitted by authors who are independent of VADA. While VADA and the newsLINK Group encourage 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 newsLINK Group at (855) 747-4003. 4 8 CONTENTS Pub. 5 2024 Issue 2 Virginia Automobile Dealers Association A Message From President and CEO Don Hall 4 Why Transparency Is the Name of the Game 6 6 Virginia Dealers Among Top in U.S. 8 California Standards and EVs in Virginia 12 Climbing the Automotive Industry Ladder of Success By Sharon Kitzman, Dominion DMS 14 Structure Reinsurance To Get the Most From Your Warranty Programs By Truist Dealer Services 17 Legal Updates 18 Leadership 19 Thank You VADA Allied Members 20 Thank You VADA Program Partners 22 Driving Virginia’s Economy 12 2 Virginia Auto Dealer
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RRecently, a close friend shared a car-buying experience that was, unfortunately, something we still occasionally hear about in the state and our industry. After negotiating with the dealer for nearly two weeks and settling on a price, he returned to the lot to close the deal — only to be met with nearly $10,000 in additional surcharges. While my friend did not believe there was malice at play, this no doubt had a serious, negative effect on his customer experience. If the dealership had been open and transparent from the outset, that experience may have been much different. In fact, when the dealer learned of the situation, it was addressed immediately. Why Is This So Important Now? You are likely aware of recent news surrounding the real estate industry and a settlement their national association reached with the U.S. Department of Justice regarding alleged antitrust violations related to commissions. Proponents of the settlement say the changes increase competition and much-needed transparency. Yet if you talk to honest real estate agents, who are already used to doing business the right and transparent way by understanding the needs of their client, it’s business as usual. While these new rules are codified, many agents didn’t need the official change to do things the right way. Still, you’d be hard-pressed to not find parallels in this real estate case to other industries — and definitely our own. And things are heating up, with auto dealers increasingly under the Fed’s microscope. To be sure, the Federal Trade Commission’s CARS Rule is burdensome and the commission has failed to justify why changes to the way people shop for and purchase new cars is necessary. The FTC has failed to demonstrate how any of these changes would actually benefit consumers. The rule would require massive amounts of time, complexity, paperwork — and cost — to automobile buying and shopping. NADA is challenging the rule in court and supporting federal legislation to prevent the FTC from implementing or enforcing this ill-conceived rule. But the hard truth, however, is that auto dealers are historically not known as transparent entities to consumers. Whether that is true of your operations requires taking a hard look inward. The overwhelming majority of our VADA members do business the right way. And if you want to stand the test of time, you must embrace the idea of being incredibly transparent with your customers. That means there should be no surprises for anyone who walks through your front door or visits your website. You must be up front on pricing and in your advertising — make it clear there are taxes and fees you plan to charge on top of MSRP. When it comes to additional products and services, are you selling those that are the right fit for the individual customer, or the right fit for your F&I team to hit their monthly numbers? Customers should understand the value — or lack of value for their own unique needs — of those addon products before they sign on the A MESSAGE FROM PRESIDENT AND CEO DON HALL Why Transparency Is the Name of the Game 4 Virginia Auto Dealer
Keith A. Laudenberger, CPA klaudenberger@cbmcpa.com Councilor, Buchanan & Mitchell’s automotive dealership accounting team is your trusted partner in achieving your financial goals. Our professionals are experienced leaders with a deep comprehension of the challenges and opportunities faced by the automotive industry. Contact us today if you are ready to experience personalized service. cbmcpa.com 301.986.0600 7910 Woodmont Ave, Suite 500 Bethesda, MD 20814 John R. Comunale, CPA jcomunale@cbmcpa.com STEERING YOUR FINANCIAL SUCCESS IS OUR BUSINESS Tax Planning & Preparation Cost Segregation Analysis Mergers & Acquisitions Audits, Reviews & Compilations Business Process Review Succession Planning LIFO Inventory Fraud Prevention Buy/Sell Agreements Business Valuations Financial Planning Wealth Management Our Services: dotted line. That may mean a change in your F&I commission structure and the way they are sold. Ask yourself how you met your revenue projections for the month. The devil’s in the details. CARS goes too far, for sure. But, collectively, Virginia dealers must also choose to operate with utmost transparency. And as the story we related to start this column shows, you have to ensure that your dealership culture embraces that transparency. If you do that, like the honest real estate agents out there, there’s nothing to fear when it comes to the implementation of federal and state rules and regulations. The best dealers always find a way. Get Back to the Basics I understand there is pressure from all sides to generate a profit, especially in an ever-inflationary environment where margins are tight. The cost of doing business, not the least of which is labor, has gone up. But if you choose to hold onto the ways of yesteryear and are not willing to change with the times, you will be left in the cold. Let’s ensure our industry thrives and shapes the future of automotive retail in Virginia and beyond for the better. vada.com 5
Among Top in U.S. Not one, not two, but six Virginia dealers made the cut for this year’s Top 150 Dealership Groups. Recently released by Automotive News, the prestigious list ranks the largest auto retail groups by sales of new vehicles. All told, the top dealers sold nearly 3.8 million new vehicles last year. Who made the list for Virginia? No. 16: Ourisman Automotive Group • President/Owners: Ourisman/ Korengold • Revenue: $3,202,034,263 No. 33: Sheehy Auto Stores • President: Vincent Sheehy • Revenue: $2,204,825,000 No. 36: Pohanka Automotive Group • President: Scott Crabtree • Revenue: $1,829,407,153 No. 38: Safford Automotive Group • President: James Gramm • Revenue: $1,663,675,214 No. 87: Carter Myers Automotive • President: Liza Borches • Revenue: $1,021,652,368 No. 117: Rosenthal Automotive Organization • President: Robert Peterson • Revenue: $1,014,836,651 In addition to these dealers, others who do business in Virginia made this year’s list. These groups are: No. 1: Lithia Motors Inc. • President: Bryan DeBoer • Revenue: $31,042,383,701 No. 2: AutoNation Inc. • President: Mike Manley • Revenue: $26,948,900,000 No. 3: Penske Automotive Group Inc. • President: Roger Penske • Revenue: $29,527,413,000 No. 5: Asbury Automotive Group Inc. • President: David Hult • Revenue: $14,802,690,000 No. 6: Sonic Automotive Inc. • President: David Smith • Revenue: $14,355,500,000 No. 7: Hendrick Automotive Group • President: Rick Hendrick • Revenue: $12,800,582,791 No. 19: Victory Automotive Group (Soon to have groups in Virginia) • President: Jeffrey Cappo • Revenue: $2,633,848,179 No. 31: DARCARS Automotive Group • President: John Darvish • Revenue: $2,520,787,919 No. 86: Murgado Automotive Group • President: Mario Murgado • Revenue: $1,652,588,634 No. 135: Criswell Automotive • Dealer: Harry Ellsworth Criswell III • Revenue: $545,896,129 6 VIRGINIA DEALERS 6 Virginia Auto Dealer
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?® JL Winslow, jl.winslow@bofa.com business.bofa.com/dealer ©2023 Bank of America Corporation. All rights reserved. DFS-699-AD 5949042 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.
California Standards and EVs in Virginia
To read the full release, scan the QR code. https://www.governor.virginia.gov/ newsroom/news-releases/2024/ june/name-1028520-en.html OOn June 5, 2024, Gov. Youngkin announced the end of the California electric vehicle mandate in Virginia, effective at the end of 2024 when California’s current regulations expire. An official opinion from Attorney General Jason Miyares, in response to a request by Gov. and Senate Republican Leader Ryan McDougle, confirmed that Virginia is not required to comply with expansive new mandates adopted by the unelected California Air Resources Board (CARB) set to take effect Jan. 1, 2025. VADA President and CEO Don Hall’s Statement Our support for the California Air Resources Board standards was done to drive demand for fully electric vehicles in Virginia and support dealer interests, as doing so put the Commonwealth in a stronger position for manufacturers to send EVs to our dealers and consumers. The reality, however, is that consumer demand for EVs in Virginia and nationally has not yet materialized, compounded by costs, “range anxiety” and the lack of charging and electrical infrastructure to support these new vehicles. We continue to believe EV goals are achievable, but on a longer timeline. We respectfully have come to the point where we believe Virginia should uncouple itself from these standards at this time. The lack of bipartisan support and funding for the standards means an unfunded mandate is weighing down Virginia with goals that are impossible to attain in the 2035 timeframe, as currently required. Virginia and many other states continue to be held under federal emissions standards, which do not necessarily require all vehicles be zero-emissions, opening the door for more hybrid vehicles in addition to a mix of EVs and internal-combustion engine (ICE) vehicles. Despite government-driven goals, it is important to recognize that Virginians, and all Americans, will always have a choice in the type of vehicles they buy. Virginia dealers continue to be “all in” to sell and service not only EVs, but also hybrid and ICE cars and trucks. Virginia dealers will continue to make investments to prepare for the electrification of the transportation industry. We appreciate the attorney general’s focus on protecting consumers and Virginia businesses. Without full support from the legislature and Virginia’s administration, an unfunded mandate only hurts our dealers — and the drivers and families they serve. Moving forward, it is critical to find a balanced approach that considers industry realities, consumer needs, and policies that help, not hinder, progress. We remain committed to discussions at the state and national level to ensure automobile dealers can continue to meet the needs of their customers and communities. Background on CARB in Virginia In 2021, Virginia lawmakers, with VADA’s support, adopted California’s CARB zero-emissions vehicle (ZEV) mandates. The move was meant to help pave the way for more fully electric vehicles in Virginia. Under CARB, Virginia regulations require 100% of all new vehicles in Virginia to be fully electric by 2035. Why? Because states that adopted and implemented the ZEV standards were put in a stronger position to receive EVs consumers want to buy, as manufacturers receive federal tax credits for EV sales. Furthermore, most auto manufacturers made it clear they are committed to phasing out gas-powered engines over the vada.com 9
next two decades. Virginia was the 15th state to adopt the California standards and is one of 18 states and the District of Columbia to have them. Unfortunately, the lack of consumer adoption and state funding for CARB meant the policy hurts, not helps, consumers and auto dealers. In 2022, the Virginia Office of the Attorney General ruled that the Commonwealth is “bound” by the California decision to go fully electric because the Commonwealth’s leaders chose to be “statutorily and regulatorily aligned with California.” To change may require an amendment or repeal of the legislation, the office said. The General Assembly directed Virginia’s Department of Environmental Quality to adopt the California Clean Cars I program and amendments to it. The Governor’s office says Virginia law does not compel the adoption of the second — and more expansive — iteration of California’s standards, Advanced Clean Cars II (ACC II). This is an entirely new regulation, not simply an amendment to the existing ZEV standards. As such, the Attorney General has concluded the 2021 Virginia legislation does not require the Commonwealth to adopt the new regulation. Q&A The Market for EVs in Virginia According to a 2023 Economic Impact Report from VADA: • EVs account for 8.8% of all new vehicles sold in Virginia, up from 3.1% in 2021. Hybrid vehicles (which use gas, but recharge a battery for greater mileage) accounted for 11% of sales. However, hybrids do not contribute to CARB targets. • The average Virginia dealership invests $348,000 to upgrade their infrastructure to support EVs. • Virginia dealers are expected to spend $159 million in 2024 upgrading their facilities to sell and service EVs. • Dozens of new fully electric models will be released over the next few years from well-known manufacturers. 10 Virginia Auto Dealer
How Is VADA Reacting to This Announcement by the Attorney General? VADA proudly represents and informs dealers across the Commonwealth, many of whom share concerns surrounding the adoption and implementation of fully electric vehicles. With that mission is a responsibility to listen to consumers and dealers. What they are experiencing is a gap between legislative commitment and practical implementation, with no allocated budget for incentives or sufficient infrastructure to support achievement of the specified standards. Despite this, VADA emphasizes the inevitability of the EV revolution and Virginia’s role as a leader in fostering adoption of these exciting new vehicles. VADA advocates for comprehensive policies, including infrastructure and incentives, to support the transition to electric transportation. What Does This Recent Announcement Mean for Consumers? We urge consumers to continue to follow the developments out of Virginia and Washington to become informed buyers and sellers who are — in many ways — in the driver’s seat. We want all Virginians, and all Americans, to always have a choice in the type of vehicles they buy and sell. Where Do Federal Emissions Standards Factor In? Possible reversal of CARB doesn’t mean Virginia is free of regulation or emissions standards. States can choose to follow the California standards or the corresponding federal standards under the Environmental Protection Agency’s Clean Air Act. If CARB does not apply to Virginia, the EPA’s Clean Air Act and its parameters for vehicle emissions still do. Unlike California standards, federal regulations only pertain to emissions standards, not a particular type of drivetrain. • The EPA mandate requires 67.5% of U.S. car sales to be fully electric by 2032, leaving a significant amount of opportunity for new hybrid and internal-combustion vehicle sales. What Does This Mean for the Future of Electric Vehicles in Virginia? VADA continues to believe in an EV future, as evidenced by manufacturers investing heavily in developing these new vehicles. But regulation and policy must match reality. Under CARB or federal standards, Virginians, and all Americans, will always have a choice in the type of vehicles they buy. Virginia dealers continue to be “all in” to sell and service not only EVs, but also hybrid and ICE vehicles. Virginia dealers will continue to make investments to prepare for the electrification of the transportation industry. Is VADA Simply Aligning Itself With Each Administration’s Changing Policies? As a nonpartisan organization, VADA aligns and support policies that meet the needs of consumers and dealers and what we believe is best for Virginia at any given time. You Have Publicly Supported CARB and Virginia’s Adoption. Why Are You Changing Your Stance Now? Our position in support of the ZEV mandates was not the traditional posture of dealer associations. We believe we charted the right course for Virginia dealers. We would not have been in the position to affect the EV issue more broadly had we taken a different position on this issue. EV adoption will be achieved only with the investment of all parties: manufacturers, dealers, electric utilities, environmental groups, government and consumers. Pricing and Demand of EVs According to Kelley Blue Book, the cost of EVs has gotten closer to traditional vehicles, but only because the cost of traditional vehicles has risen: • January 2020: Average price of EV is 34% higher than ICE ($54,669 vs. $38,747). • January 2024: Average price of EV is 17% higher than ICE ($55,353 vs. $47,401). A Boston Consulting Group study found U.S. consumer acceptance of EVs hinges on four factors: 1. 20-minute charging times. 2. 30-minute maximum to find and wait for access to a fast-charging station. 3. 350 miles or more of driving range per charge. 4. Price of $50,000 or less, along with more vehicle variety. vada.com 11
I Climbing the Automotive Industry Ladder of Success By Sharon Kitzman, Dominion DMS In the auto industry, there is a gap between the number of women in leadership and those who buy cars. Maintaining that discrepancy is risky because it shows a lack of innovation when serving the market. Interestingly, women buy 62% of all vehicles today. Even if they don’t purchase directly, they influence 85% of car-buying decisions. Yet, while more women are in automotive leadership roles than ever, the statistics are still not great. According to Deloitte’s recent study, women account for 47% of the labor force but only 27% of the autoindustry workforce, even though those who are in the industry really enjoy it (Women at the Wheel study). The 330 women surveyed, also in a study by Deloitte and Automotive News, have an average tenure of 15 years at the same company and over 26 years in the industry. More than 80% are senior managers (directors, vice presidents and other C-suite occupants), and almost 60% are in marketing, sales, operations or product development. In most industries, women prefer conducting business with other women. Whether it’s their banker, doctor, lawyer, psychologist or salesperson, most women want to deal with the same gender because they feel more heard than when dealing with a man. Even though most women have done their research, they want someone who can understand them and listen. Can a man do this? Absolutely! But sometimes, women need to see another woman in the business before they will walk through the door in the first place. So why are there not more women in our industry? From the day in 1882 when Bertha Benz became the first person to complete a long-distance automobile trip, women have popularized the automobile and staged and led many noteworthy developments. There are many reasons why the auto industry fits well with women, and perhaps we all need to do a better job of highlighting those: 1. It’s a great industry for a career change. Many people find the need to switch careers, and the auto industry is an exceptional place to land. For many women looking to return to the job market after a leave of absence, the auto industry has many soft-skill jobs that offer a solid career path, from accounting to finance and beyond. 2. The opportunity to learn new skills. The auto industry offers a wide 12 Virginia Auto Dealer
range of positions, each requiring specific skills to be learned and mastered. 3. A wealth of lateral job moves. Not all job moves need to go straight up. The auto industry has many opportunities that zig-zag, yet they still allow for growth. 4. Charting a career path. The auto industry offers excellent opportunities for advancement. It’s a matter of being observant, asking questions and seeking out the opportunities that arise often in most dealerships. One of the best approaches to success in the auto industry is developing a strong network of allies, mentors and good people to know. And I think there’s no better industry than the automotive industry to start your network. Most dealer principals have more than one story about the people who taught them the business and set up their career trajectory for success within the business — and they typically want to return the favor. Another great source for your network is tapping into your vendor relationships, especially if you already work in the auto industry. Strong vendor partnerships are among the greatest strategic growth tactics and best practice resources available to nearly every industry, including the auto industry. By collaborating with suppliers and vendors, within the framework of a true partner relationship, you can multiply success and profits exponentially. And the best part? Everyone benefits. A genuine mutual relationship that promotes problem-solving is an advantage for profit margins and creates a more productive and engaged organization that focuses on quality outcomes. While this should be a best practice for everyone, it’s especially important to women in the auto industry. As women in the auto industry, it’s important to identify what resources you need to do your job successfully, what resources influence your job area, and what resources can further your career and connect with them. Strong vendor relationships allow you to leverage your time, and strong mentor relationships give you the inside track on how to get things done. The future of women in the auto industry is strong; it won’t remain at 27%, and that’s a good thing. Study after study has shown the importance of gender diversity in all industries, including the auto industry. Companies with diverse management teams experience 19% higher revenue and are 70% more likely to enter new markets. Furthermore, diverse teams are 12% more productive. Better still, turnover goes down 45%. In the automotive industry, where technological advances and shifting consumer demands drive rapid change, embracing diversity and inclusion has never been more crucial. Sharon Kitzman leads the launch and long-term growth of Dominion DMS. Previously, she managed the strategic direction and product development for Reynolds & Reynolds and Dealertrack. Her experience spans every area of dealership software development, including sales, marketing, product lifecycle management, process re-engineering, OEM management, professional services and customer services. Kitzman is a recognized leader in the automotive industry for her expertise in DMS technology. She received numerous accolades for her leadership, including Automotive News Top 100 Leading Women 2015 and 2020, Auto Remarketing Women in Retail 2021, and AutoSuccess Women at the Wheel 2021. She has a Bachelor of Business Administration from Ohio State University. Sharon Kitzman is passionate about creating and nurturing partnerships within the automotive industry and regularly discusses the many vendor products and services within the auto industry on her VUE Points podcast. Listen here: https:/ www.dominiondms.com/podcasts/ vada.com 13
Structure Reinsurance To Get the Most From Your Warranty Programs By Truist Dealer Services TTailwinds in the auto retailing business continue to provide resources for dealers to build out programs that strengthen their business model and deliver more value to customers. Properly structured and managed finance and insurance (F&I) reinsurance programs are an example of programs that can deliver a steady boost to dealer financial performance. While dealers need to focus on the product and sales side of these programs, it’s the often-overlooked reinsurance components that can deliver added profitability and provide a means of accumulating assets. The structure of F&I programs often changes over time. Many dealers start by offering warranty plans and service contracts that are directly managed and collateralized by a third-party provider or insurance company. In this arrangement, premiums are deposited into a custodial account that holds the premium reserve funds used to cover warranty and service claims. The provider, or insurer, is responsible for the funds in the custodial account. Profits are earned from any unused funds (profits) retained after claims are paid out. Different reinsurance opportunities emerge as programs mature. By setting up their own reinsurance company and trust, dealers can assume more risk and capture a greater share of the underwriting profits and investment income that these programs generate. How Does a Dealer-Owned Reinsurance Trust Work? A dealer establishes a reinsurance company for the purpose of reinsuring F&I products. This approach shifts the risk to the dealer, but acting as your own reinsurer means you gain more control over how the premium funds are invested — and impacts the returns you earn. Dealer-owned reinsurance companies partner with a commercial insurance company that underwrites the F&I products. Referred to as the “fronting” company, this insurance partner gets a portion of the premiums paid, although the dealer reinsurance company assumes the risk and responsibility for the payment of claims. Unearned Premium Reserve (UPR) funds are used for paying out claims. Premiums are deposited into trust accounts set up by the dealer insurance company. The state, or the insurer, sets guidelines restricting how UPR funds can be invested. A Surplus Account Could Mean Higher Returns At the end of a policy or contract term, unused premiums create a surplus. Some dealers choose to set up a separate “B” account within the reinsurance trust for these surplus or “earned” funds. Unused premiums are considered “earned” funds and are not subject to the same restrictions as the UPR funds. This means they can be invested in equities and other securities that offer higher expected yields than the more conservative investments required for the UPR funds. The dealer has full access to money in the “B” account, which can be used at any time. A lower loss ratio generates more surplus. If it remains in the trust, it can grow without triggering an increase in your taxable income. Beyond the Obvious Benefits Although the primary objective of forming your own reinsurance company is to have more control and capture more profit and income, it can provide additional benefits when used strategically. Your reinsurance program can help you build wealth, fund your succession plan, create golden handcuffs for key employees and much more. Plus, you can establish as many reinsurance companies as you like. 14 Virginia Auto Dealer
An effectively structured and well-managed reinsurance program can generate considerable wealth and you can put it to use in several different ways: • Diversify your retirement income stream and help you reach your financial goals more quickly. • Designate funds for succession planning by building the working capital future leaders will need as they assume a leadership position. If you hope to pass on the dealership to your children one day, a reinsurance trust for their benefit can be a source of capital they can use to purchase the dealership. • Funds to reward and retain valuable employees on your team. In this scenario, you’d form a reinsurance trust for key employees to serve as a type of deferred compensation plan. • Capital for expansion through strategic buy/sells or for scaling the existing operations to compete in the consolidating auto retail sector. Continued on page 16 vada.com 15
Optimizing Your Investment Performance Minimize risk and maximize performance by seeking out an investment manager with a track record of investment performance and expertise in auto dealer reinsurance trusts. The right investment manager will outline the structure and investment policies for your UPR funds to stay within insurer and regulatory requirements and help you set realistic expectations for the returns from your “B” account. They’ll build your portfolio to meet your risk tolerance and timing goals. Fees and expenses are often overlooked but can impact your reinsurance trust returns. Some investment managers augment low management fees for investment portfolios by including their own proprietary funds. These funds, which generate incremental fees, are easy to miss, so look for them and ask for a full disclosure of all fees and expenses, along with an explanation of each. Talk to Truist to get the most from your reinsurance programs. Truist has the specialized expertise and experience to help you structure your reinsurance programs and get the most out of them. We offer a dedicated team of experts focused exclusively on collateral management and reinsurance trust investing, and we’re ready to help you set up your program. To learn more about Truist Dealer Services, visit our website at Truist.com/DealerServices. Truist Bank, Member FDIC. © 2024 Truist Financial Corporation. Truist, the Truist logo and Truist Purple are service marks of Truist Financial Corporation. Equal Housing Lender. Enjoy your association news anytime, anywhere. Scan the QR code to visit our online publication to stay up to date on the latest association news, share articles and read past issues. virginia-auto-dealer.thenewslinkgroup.org Continued from page 15 16 Virginia Auto Dealer
TThe Federal government was very busy this spring, issuing a flurry of laws that affect dealerships and dealership personnel. Among them: • The increased threshold salary of employees who are exempt from overtime because of the administrative, executive, professional exemption and the qualifications for that exemption. • Dealers must provide reasonable accommodations for a worker’s known limitations related to, affected by, or arising out of pregnancy, childbirth or related medical conditions and examples of those conditions. • Dealers’ requirement to file a notice with the FTC if a breach occurs of customer information of at least 500 customers. • FTC bans noncompetes as of Sept. 4, 2024, with all employees, including those senior executive employees. The key takeaway: Dealers must be proactive with compliance and ensure that employees are trained! Noncompliance can be costly. Legal Updates Scan the QR code to find an in-depth analysis on each issue from our legal counsel, Barrie Charapp Beaty, with Charapp & Weiss LLP. https://vada.com/blog/2024/05/13/ wishlist-items-become-law/ vada.com 17
VADA Executive Committee David Dillon Chair Southern Team Auto Group Dan Banister Vice Chair Banister Automotive Roger Keller Treasurer Sheehy Auto Stores Eley Duke Secretary Duke Automotive Don Hall President Liza Borches Immediate Past Chair Carter Myers Automotive Tim Pohanka Legislative Chair Pohanka Nissan Hyundai Chris Lindsay PAC Chairman Lindsay Automotive VADA Board of Directors John Altman Beyer Automotive Group William Baker Hall Automotive LLC Daniel Banister Banister Nissan of Chesapeake Liza Borches Carter Myers Automotive Emily Marlow Beck Marlow Motor Co. Gardner Britt, III Ted Britt Ford Lincoln of Chantilly Andy Budd Country Chevrolet Harry Carrion Haley Automotive Mark Dalton Terry Volkswagen Subaru David Dillon Southern Team Auto Group Eley Duke Duke Automotive LEADERSHIP Eric Flow Flow Motors Don Hall Virginia Automobile Dealers Association Tanner Hulette Mechanicsville Toyota Cameron Johnson Magic City Ford Lincoln Isuzu Roger Keller Sheehy Auto Stores Steve Klimkiewicz Cavalier Ford Lincoln Ashton Lewis, Jr. First Team - Automotive Christopher Lindsay Lindsay Chevrolet Ross Luck Luck Chevrolet Thomas Mohr Highway Motors Michael Patrick Patrick GMC Dave Perno Loyalty Automotive Tim Pohanka Pohanka Nissan Hyundai Rachel Pullen Safford Brown Jake Sodikoff Steven Nissan Michael Suttle Suttle Motor Corp. Robbie Woodall Robert Woodall Chevrolet Buick GMC Cadillac Hyundai Nissan Virginia Motor Vehicle Dealer Board RJ Robinson Parks Chevrolet Ron Kody Richmond Ford Lincoln Thomas Bates RK Chevrolet Subaru M. Gardner Britt, Jr. Ted Britt Ford Lincoln Dennis Ellmer Priority Auto Group Geoffrey Malloy Malloy Automotive Group Daniel Banister Banister Nissan of Chesapeake VADA Group Self-Insurance Association Board of Directors Michelle Radley Radley Automotive Group Chris Brown Haley Automotive Burt Brenner Lindsay Lexus of Alexandria Penny Burch Magic City Ford Lincoln Isuzu Fred Kirschbaum Checkered Flag Motor Car Co. Chris Strosnider Strosnider Chevrolet Don Hall Virginia Automobile Dealers Association Gerald Duncan Duncan Ford Chrysler Dodge Jeep Adam Johnson Johnson Family Chevrolet Thaddeus Nowak Ted Britt Ford Lincoln Ralph Mastantuono American Service Center Associates Rich Tritel Carter Myers Automotive Cole Balderson Ourisman Automotive of Virginia HRADA Officers Pat Fields President Wynne Ford Volvo Gerry Reust Vice President Cavalier Ford Heath Wynn Treasurer Hall Auto Group Mike Owen Secretary Southern Auto Group Rebecca Wilson Immediate Past President Checkered Flag Honda HRADA Board of Directors Jarryd Carver Winners Circle Auto Group Brian Clark Charles Barker Mercedes-Benz Ken DeBerry Cavalier Mazda Tom Ellmer Priority Auto Group Jim Hernandez Priority Honda Dave Lawson Classic Hampton Auto Mall Cameron Shaw Southern Auto Group Larry Stevenson Classic Hampton Auto Mall Allied Member Bryan Dougherty ACV GRNCDA Board of Directors Keith Hightower Chairman Pearson Honda Zach Cochran Vice Chairman Whitten Brothers Harry Carrion Secretary/Treasurer Haley Automotive Michael Patrick Immediate Past Chairman Patrick Buick GMC Brenton Evans Audi Richmond Ed Hartoonian Hart Nissan Kayla Kody Richmond Ford RJ Robinson Parks Chevrolet 18 Virginia Auto Dealer
Accumatic Inc. Ally Financial Assurant Atlantic Union Bank Bank Of America — Merrill Lynch BDO USA LLP Blue Whale EV Brightline Dealer Advisors Brown, Edwards & Co. CarNow CBIZ Chase Dealer Services Computerized Vehicle Registration Core 22 Design Build Core Assurance Councilor, Buchanan & Mitchell, PC Crovato BG Products & Services Diamond Dealer Services Dominion DMS DSMA Dynatron Software Ethos Group Forvis Foti, Flynn, Lowen & Co. Fulton Bank GM Financial Greensboro Auto Auction Haig Partners Hiko JM&A Group Kerrigan Advisors KPA M&T Bank Mahdavi, Bacon, Halfhill & Young PLLC Manheim Fredericksburg Manheim Harrisonburg PDP Group PMA Management Corp. Protective Asset Protection Quantum5 Solera TitleTec Strategic Source TowneBank True Car Truist Bank United Bank Wells Fargo Dealer Services VADA ALLIED MEMBERS THANK YOU! vada.com 19
ACV is investing in game-changing technologies and world class people to improve the wholesale process for all dealers. They provide unbiased vehicle information that is unparalleled in its transparency. Their inspectors complete comprehensive condition reports on fresh vehicles, right at the seller’s lot. Cintas leads the industry in supplying corporate identity uniform programs, providing entrance and logo mats, restroom supplies, promotional products, first aid, safety, and fire protection products and services. Learn how Cintas’ solutions can benefit your sales and service departments at cintas.com. Forget the forms, binders, spreadsheets, folders, manual audits and training sessions. Compliance is automatically performed, logged and demonstrated in one simple platform. They’re not just another software company. They’ve actually worked at dealerships and have spent their entire legal and compliance careers in the automotive industry. You can receive optimal results for your parts warranty uplift. Just outsource the process to Armatus. Hand the entire retail warranty process to them, and you won’t have to lift a finger. Plus, there are no upfront fees — Armatus doesn’t get paid until you do. Dealertrack Technologies offers a cutting edge web-based registration and titling solution developed with input from dealerships across the Commonwealth. They are the only registration and titling company endorsed by VADA. Digital Air Strike is the leading social media, intelligent lead response, consumer engagement and customer experience (CX) technology company helping over 7,700 businesses increase consumer response and conversions by leveraging patented AI-powered digital technology that generates measurable ROI. A pioneer in digital response, social media marketing technology and online reputation management solutions, Digital Air Strike deploys industry-specific mobile apps, software, intelligent messaging and consumer engagement platforms to monitor, respond, improve and convert more consumers into customers for thousands of businesses in the United States. More information about the company is available at www.digitalairstrike.com. As specialists in the antitrust settlement field, DCap makes antitrust claim filing easy for businesses, navigating the inherent complexities of the process and maximizing claim refunds for its clients. For nearly a decade, DCap has provided premier settlement education, guidance and ongoing support, resulting in millions of dollars recovered, for thousands of businesses. VADA PROGRAM PARTNERS THANK YOU! Directly from state registrations, CrossSell Interactive® vehicle data provides insight into customized local markets to help dealerships and dealer partners create strategies for increased market share. CrossSell reports provide in-depth views of local automotive sales, registrations and trends. VADA regularly publishes articles and news from our Program Partners. It’s content that makes you a more informed dealer. Find it at vada.com/news. For more information on our programs, contact Steve Hoffman at shoffman@vada.com. 20 Virginia Auto Dealer
DMS allows dealers to take advantage of federal law to greatly diminish their expenses with credit card processing fees, typically between 75%–95%. DMS can save some dealers well over $100,000 per year in fees. Find out how at dealermerchantservices.com. Zurich F&I professionals can help you increase product penetration, per vehicle retail, and customer satisfaction. They currently work with more than 100 Mid-Atlantic dealers, helping them build relationships with their customers and increase product sales. Promote your business, reduce compliance risk, manage data and keep your office inventory stocked with Reynolds Document Solutions. As the provider of Connect CRM, a leading dealership customer relationship management system, VinSolutions helps more than 5,000 dealers make every connection count. VinSolutions products integrate dealership systems, processes and tools to deliver a single view of the customer across the business. RockED’s mobile learning platform turns employees within minutes into customercentric high-performers. The app allows for learning anytime, anywhere, through a mobile solution. Lessons are based on competencies and include highly relevant, industry-specific audio-visual content delivered by industry leaders. Learn more at rocked.us. Integrum Advisors comes to work each and every day to ensure they have you covered. They take pride in providing sound advice to all of our clients. Integrum Advisors’ job is not done until you have complete peace of mind that you and your employees are receiving the best benefits and service available. MOC® is a leading provider of innovative products and solutions to the retail automotive industry. Their program is designed to provide new car dealers the ability to buy necessary products, tools, and equipment at manufacturer direct pricing, but also receive unprecedented local and regional service and support. One Source Wonderful! Your local, one-stop shop for all departments supply needs! In 2010, Co-Founders Adam Robinson, Michael Krasman and Jeff Ellman reinvented the hiring process, empowering businesses to ditch their filing cabinets and manilla folders in exchange for an intuitive, technology-based hiring process. Sqwire’s mission is to help low- to moderate-income families realize their financial promise by providing financial education that is hopeful, respectful and fun. Financial education includes topics that build a solid financial foundation, using tools created specifically for today’s adult learners and quizzes, and detailed reporting ensures clients meet their goals. Learn more at getsqwire.com. Management consulting, human resource management and labor relations. For more information visit: sescomgt.com. FreeWire Technologies offers ultrafast, battery-integrated electric vehicle (EV) chargers to franchised new car and truck dealerships across the Commonwealth. FreeWire’s Boost Charger™ 200 is a flexible Level 3 DC station, housing a battery within its design to lessen the impact on the electrical grid while charging EVs. vada.com 21
Source: Bureau of Labor Statistics, Center for Automotive Research, NADA, S&P Global, Taxfoundation.org, U.S. Census Bureau $2.5B $27.2B 2.2% Includes income taxes paid for direct, indirect and induced jobs. PAYROLL TOTAL SALES (all dealerships) REGISTRATIONS STATE SALES TAX PAID NATIONAL AUTOMOBILE DEALERS ASSOCIATION NADA Industry Analysis | 8484 Westpark Drive, Suite 500, Tysons, VA 22102 | 800.557.6232 | economics@nada.org NADA Legislative Affairs | 412 First St. SE | Washington, DC 20003 | 800.563.5500 | legislative@nada.org 459 DEALERSHIPS (new car) 61,311 TOTAL JOBS (created by dealerships) Includes 30,577 direct jobs and 30,734 indirect and induced jobs. 67 EMPLOYEES (average per dealership) Driving Virginia’s Economy Annual Contribution of Virginia’s New-Car Dealers Numbers reflect annual economic activity during 2023. $80,964 Average Annual Earnings $720M State and Federal Income Taxes Paid Virginia’s Share of Total U.S. New-Vehicle Registrations $1.2B 22 Virginia Auto Dealer
© 2024 Truist Financial Corporation, TRUIST, Truist purple and the Truist logo are service marks of Truist Financial Corporation. All rights reserved. Truist Securities is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries. Securities and strategic advisory services are provided by Truist Securities, Inc., member FINRA and SIPC. | Lending, financial risk management, and treasury and payment solutions are offered by Truist Bank. | Deposit products are offered by Truist Bank, Member FDIC. We’re more than a financial partner. We’re an invested one. True relationships matter. We don’t take this lightly. The best are built on a deep understanding of your short- and long-term goals and always backed by thoughtful, strategic advice in support of your vision. With full-service financial solutions and a deep bench of industry expertise, we’ll build a team around your organization to focus on your success. So, let’s drive further—together. To learn more, visit us at Truist.com/DealerServices.
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