Clunkers: Deals and Headaches •Chrysler, GM Adding Dealerships? •Non-Competes: Enforceable?
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MSADA, One McKinley Square, Sixth Floor, Boston, MA 02109 FIRST CLASS MAIL M A SS A CHUS E TTS US POSTAGE PAID BOSTON, MA PERMIT NO. 216 AUTODEALER August 2009 • Vol. 22, No. 6 The official publication of the Massachusetts State Automobile Dealers Association, Inc INSIDE: •Cash For Clunkers: Deals and Headaches •Chrysler, GM Adding Dealerships? •Non-competes: Enforceable? M A SS A CHUS E TTS AUTODEALER The official publication of the Massachusetts State Automobile Dealers Association, Inc ST A FF DIRECTORY Robert O’Koniewski, Esq. Executive Vice President [email protected] Tab L E O F C ONTENT S Irene Varao Director of Administration [email protected] Tricia White 4 FROM THE PRESIDENT: Confusion Reigns Accounting and Membership Manager [email protected] 6 POLITICAL ACTION: The Three Billion Dollar Baby Mike Nixon AYES State Manager [email protected] 8 COVER STORY: Sam Poikail “Cash for Clunkers” Information Technology & Membership Information Manager 10 LEGAL: “Are These Thing [email protected] Tom Nash Enforceable?” Editorial Coordinator [email protected] 11 INSURANCE: Karen Kast-McBride Administrative Coordinator Catalytic Converter Theft [email protected] Nicole Ventosi 12 THE TRUCK CORNER: Administrative Assistant Walking the Halls of Congress, Part II Paul Fellows Summer Intern 13 ACCOUNTING: COBRA Changes Explained Subscriptions provided annually to 14 NEWS From Around the Horn Massachusetts dealers. All address changes should be submitted to: MSADA by e-mail: 15 CALENDAR [email protected] Postmaster: 18 AYES Send address change to: One McKinley Square, Sixth Floor Boston, MA 02109 21 NADA UPDATE Auto Dealer is published by the Massachusetts State Automobile Dealers Association, Inc. to provide information about the Bay State auto retail industry and news of MSADA and its membership. www.msada.org Massachusetts Auto Dealer AUGUST 2009 4 from the PRESIDENT by James G. Boyle, President, MSADA Confusion Reigns as Clunkers Program Concludes K eeping up with this stuff is hard. 4. Keep PDFs under 8 MB. Anything larger than 8 mega bytes Whether you’re a dealer, cable news talking head or will clog NHTSA’s system. Resolution should be set for 200- lawmaker, we’ve all been struggling on a daily basis to keep 300 dpi (per NHTSA’s recommendation) to help the system track of how the Consumer Assistance to Recycle and Save run more smoothly. If possible, just send one PDF. There’s no (CARS) program is faring. If it’s still moving dozens of cars need to create a separate PDF for each document, just label off your lot and keeping consumers excited by the time you each sheet (e.g. title, proof of insurance, etc.) and keep them read this, obviously it’s worth the trouble. However, when this in order. magazine went to print, it was set to end on August 24. 5. Don’t leave transactions on hold for too long. You can hit Like most Association members, I’ve been expending a lot “Save for Later” and come back to the transaction to complete of energy staying on top of the latest changes in the CARS it at a later time. But don’t wait too long. Submit it at your program. While the Association has been doing all it can to first opportunity so there is not a backlog of deals in “draft make sure dealers are kept informed, it’s clear — even after mode.” the sales window closed — the program is not going to become 6. Make sure the summary of sale and lease documents are any less of a nightmare to deal with despite the sales we’re signed by the dealer AND purchaser. Get the purchaser’s getting. Here are some pointers I’ve found useful, supplied by signature while you have them at your store. the American International Auto Dealers Association: 7. Submit Insurance Documentation. While NHTSA has made changes to the rules regarding proof of insurance for states Tips for Navigating the that do not require insurance (WI and NH), ALL other states still must submit proof of insurance for one year. CARS Program 8. Kill the engine before sending a car to the salvage yard. 1. Pay attention to detail. NHTSA reports that a number of Failing to do so will result in fines and penalties, including deals are being submitted with incomplete paperwork and removal from the CARS program as a registered dealer. missing attachments and signatures. Assign someone at the 9. If you realize you made an error in your submission, don’t dealership to be the quality checker before you hit submit. wait for NHTSA to process and reject it. You can follow four 2. Remember to write “Junk Automobile/CARS.gov” on the simple steps to cancel your submission. front AND back of the car title. Write it big and legible – some • Send an email from your registered CARS email address dealers have even had stamps made for this purpose. from your dealership account 3. Don’t submit PDFs (document scans) in color. Sure, they • Send to [email protected]. look pretty, but the time they take to load isn’t worth it. Black • Subject line should read “REJECT {INVOICE NUMBER}” and white is the way to go. – enter in the invoice number for the deal you want stopped. AUGUST 2009 Massachusetts Auto Dealer www.msada.org MSADA 5 Especially in “situations such as the CARS debacle, getting MSADA BOARD Barnstable County Gary Beard, Dick Beard Chevrolet information out to you Berkshire County [Open] quickly is extremely Bristol County Shawn O’Hara, O’Hara Mazda Essex County important. William DeLuca, Woodworth Motors Ann Regan Flynn, Regan Ford, Inc. Franklin County Steven Lorenz, Don Lorenz, Inc. • Enter in.the deal invoice number again. Hampden County Also, as an MSADA member, you can access at our Website (www. Jack Sarat, Jr., Sarat Ford msada.org) all our bulletins that we have issued on this subject matter. Further, you can always call (617-451-1051) or e-mail” (rokoniewski@ Hampshire County [Open] msada.org) MSADA Executive Vice President Bob O’Koniewski with any questions you may have. Middlesex County James Boyle, Tuck’s Trucks Chris Connolly Jr., Herb Connolly Motors A Big Welcome Scott Dube, Bill Dube Hyundai Nicole Ventosi recently came on board at the Association office as an Norfolk County administrative assistant. Nicole comes to us with some great experience. Jack Madden, Jr., Jack Madden Ford She graduated from Blue Hills Vocational High School and is very Plymouth County familiar with the automotive programs – having built cars from the John Santilli, Sr., The Nissan Center ground up. Nicole is currently on the school’s advisory board, helping Suffolk County navigate the budget cuts handed down to the school from Beacon Hill. Robert Boch, Expressway Toyota She is a great addition to our team, and her experience will help Worcester County make us even more efficient as we work toward providing value to our Joel Baker, Baker Cadillac membership. Medium/Heavy-Duty Truck Dealer Director-at-Large Association E-mail Updates Richard Witcher, Minuteman Trucks, Inc. MSADA has been aggressively attempting to update our dealer Immediate Past President contact info to include e-mail addresses for all our members. Especially Dana S. Goodfield, Dana Automotive in situations such as the CARS debacle, getting information out to you quickly is extremely important. If you are interested in receiving NADA Director Raymond Ciccolo, Village Auto Group communications from the Association in e-mail format, such as the Bulletins (a complete list of which you’ll find on page 17), please let us OFFICERS know at [email protected]. President, James G. Boyle Vice President, John Santilli, Sr. Treasurer, Steven Lorenz t Clerk, Jack Madden, Jr. www.msada.org Massachusetts Auto Dealer AUGUST 2009 6 Political ACTION The Three Billion Dollar Baby by Robert O’Koniewski, Esq. MSADA Executive Vice President Cash for Clunkers receive the clunkers reimbursement of $3,500 “Until dealers s this goes to press the federal govern- or $4,500. Yet, do you know how many staffers ment has commenced a wind down of the the government had on payroll to review these A “cash for clunkers” program. Once the transactions? 225. That would work out to about come together program ceases at 8 p.m. on August 24, the two 1,111 applications per reviewer. Even at a review biggest short-term issues that will play out are: completion of 2 per hour, we are talking weeks, (1) When will the dealers be paid for all those perhaps months, before the entire load would to beat back the clunker deals? and (2) How are dealers and their be completed. Now multiply that problem by 3 customers to address any deals that are rejected as the government threw another $2 billion into by the government? the program once it realized it did not know how Machiavellian The clunkers program has succeeded in get- much of the original $1 billion was left, if any ting customers into showrooms and moving at all. At least the government also realized they manipulations metal off of dealer lots. However, the govern- needed more staff to review the submittals and ment’s administration of the program has been a subsequently expanded staff up to 1,000. Still, disaster. From the time when dealer registration “snail’s pace” is too speedy to describe how the of the Obama packets were sent out on July 17, through to the review process is working. announcement of the wind down on August 20, At the time of this writing, perhaps 2 percent dealers have struggled to comply with the gov- of all deals have been approved and funds remit- team, dealers ernment’s rules, its bureaucratic processes, and ted to dealers.