Complying With "The Single Document Rule"

The Automobile Sales Finance Act is a frequently used tool for lawyers targeting dealerships with consumer fraud cases. A charge these lawyers often pursue after reviewing customer's sales documents is that the dealership violated the Act's "Single Document Rule." The best protection against these claims is for you to understand what the "Single Document Rule" requires and to train your personnel so that your dealership doesn't run afoul of its provisions.    more »
Advertise in Compliance with the Law

Most dealerships already use newspaper and Internet advertising as a primary source of marketing. Indeed, there are few marketing tools which afford dealerships the same ability to "drive" consumers into their showrooms more successfully than newspaper and internet advertising. However, California laws rigidly regulate dealership advertising, and dealerships which elect to use these effective methods of marketing should be cognizant of these legal requirements.   more »
Beware! Opportunistic Plaintiffs’ Attorneys Are Attempting to Take Advantage of New Wage and Hour Case

You should know that plaintiffs' attorneys are hanging their proverbial hat on a recent labor law case decided by the California Court of Appeal titled Armenta v. Osmose, Inc. to sue unsuspecting car dealerships for minimum wage violations.

In Armenta v. Osmose, Inc., the employees sued their employer alleging minimum wage violations because the employer refused to pay the employees for various non-productive tasks, such as traveling to and from distant worksites.   more »
Another Look at Negative Net Equity

Last quarter, the Dealers Advocate alerted you to a California lawsuit which could trigger liability for your dealership based upon trade-ins involving negative net equity. The Court in Thompson v. 10,000 RV Sales, Inc. found that creating an "over-allowance" for a trade-in with negative equity amounts to consumer fraud. In the Thompson case, the dealer over-valued the trade in by $24,000 so that the sales contract would reflect a positive trade-in value, even though the customer still owed $13,000 to the lien holder. The dealer then accounted for the over-allowance by adding $24,000 to the total cash price on the sales contract.    more »
Ford’s Dealership Closures Means You Should Review Your Dealer Agreement

In September of this year, Ford announced it would slash approximately 600 U.S. dealerships from its 2005 total of 4,396. Ford has now revised that plan and announced its closures will be broader than originally anticipated. Although, Ford has declined to pinpoint the exact number of targeted dealerships, it has remarked that cuts will be made from a greater number of markets than the original 18 that Ford set in its sites back in September. Ford has confirmed that dealerships in Detroit, Chicago, New York, Philadelphia, Pittsburg, St Louis, Los Angeles and San Francisco are among those selected for closure. Perhaps the broader cuts should come as no surprise since Ford has also disclosed that it bled a $5.8 billion dollar loss in this year's third quarter.    more »
Avoiding Help Wanted: A Happy Employee is a Loyal Employee

According to a report released at the 89th annual meeting of the National Automobile Dealers Association, the search is on for qualified people to help run dealerships. The employment report, based on a survey by Harris Interactive Inc., estimates that some 104,000 career job slots are available at dealerships across the nation.

In light of competition among dealerships to acquire and retain the best and brightest employees, now is the time to make sure that you are doing all that you can to instill loyalty.   more »
Don’t Forget to Tell IRS About Large Cash Transactions

Most dealerships are probably cognizant of the statutory requirement that they must report to the IRS any transaction involving $10,000 or more in cash. However, many dealerships may not be aware of the rather draconian penalties potentially facing them if they fail to comply with this reporting requirement, and more importantly, how to avoid them.

Under federal law, a dealership may be penalized up to $25,000 for each and every incident in which it intentionally disregards its obligation to report a transaction involving more than $10,000 in cash. The big question then becomes, under what circumstances does a dealership "intentionally disregard" its reporting obligations?

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