2024 NOVEMBER AUTO DEALER

2024 ANNUAL MEETING

The official publication of the Massachusetts State Automobile Dealers Association, Inc

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Camaraderie and Learning

By Jeb Balise, MSADA President

I want to thank all our dealers who took the time out of your busy schedules to attend this year’s MSADA Annual Meeting on November 1 at the Encore Hotel and Casino in Everett. And for those who brought along a GM or another key manager, thank you doubly for that commitment.

From the feedback I have heard, you enjoyed a thought-provoking and engaging program with your fellow dealers with the support of our associate members as well.

I also extend my thanks on behalf of the Association to our Annual Meeting sponsors, who we have also recognized in this month’s issue.

And as always, my sincere thanks to Executive Vice President Robert O’Koniewski and Jean Fabrizio on our Association team who put together another fantastic event. We heard a lot of valuable information, ideas, and opinions in one of the most luxurious spots in the area.

moments when we are all in the same room are too few, and it is a crucial reminder that, while we compete day in and day out, we need to present a united front to face

the challenges coming at us from all directions.

Those moments when we are all in the same room are too few, and it is a crucial reminder that, while we compete day in and day out, we need to present a united front to face the challenges coming at us from all directions.

The uncertainties of those challenges were highlighted in the following week’s election results. As of this writing, the GOP secured control of the White House, with the return of the 45th President, Donald Trump, as now the incoming 47th, the U.S. Senate, and the House of Representatives. We can expect a different direction from the incoming administration on all matters related to our industry. The specifics of what that may entail will be interesting to find out.

Finally, November also represents the start of the holiday season when our commitment to community and family is enhanced. Dealers are a giving lot and the first to be called upon to help at food banks, community centers and shelters, and hospitals to assist the less fortunate in our cities and towns during the Thanksgiving, Christmas, and Hanukah seasons.

So many benefit from all you do in your hometowns, at your dealerships, and for your association throughout the year. I am looking forward to ending 2024 on a strong note as we prepare for an exciting 2025.

Msada BOaRd

Barnstable County

Brad tracy, tracy Volkswagen

Berkshire County

Brian Bedard, Bedard Brothers Auto Sales

Bristol County richard Mastria, Mastria Auto group

Essex County

William Deluca iii, Bill Deluca family of Dealerships

Paul Bertoli, Priority chryslerJeep Dodge ram

Franklin County [open]

Hampden County

Jeb Balise, Balise Auto group

Hampshire County

Bryan Burke, Burke chevrolet

Middlesex County frank Hanenberger, MetroWest Subaru

Norfolk County

Jack Madden, Jr., Jack Madden ford charles tufankjian, toyota Scion of Braintree

Plymouth County

christine Alicandro, Marty’s Buick gMc isuzu

Suffolk County [open]

Worcester County

Steven Sewell, Westboro chrysler Dodge ram Jeep

Steve Salvadore, Salvadore Auto

Medium/Heavy-Duty Truck Dealer

Director-at-Large [open]

Immediate Past President

chris connolly, Jr., Herb connolly chevrolet

NADA Director

Scott Dube, Mcgovern Hyundai rt.93

OFFICERs

President, Jeb Balise

Vice President, Steve Sewell

Treasurer, Jack Madden, Jr.

Clerk, c harles tufankjian

ACV Auctions

MSADA A SS oci Ate M e M ber S D irectory

Steve Sirko (856) 381-3914

ADESA

Elizabeth Morich (508) 270-5400

Albin, Randall & Bennett

Barton D. Haag (207) 772-1981

Allied Recycling Center

Joseph Castaneda (781) 316-7180

American Fidelity Assurance Co.

Kathleen Weisenbach (402) 523-5945

America’s Auto Auction Boston

Chris Colocousis (774) 218-8930

ArentFox LLP

Paul Marshall Harris (617) 973-6179

Sarah Decatur Judge (617) 973-6184

Armatus Dealer Uplift

Joe Jankowski (410) 391-5701

Assurant Dealer Services

Sean Skinner (603) 660-3647

Auto Auction of New England

Steven DeLuca (603) 437-5700

Bank of America Merrill Lynch

Dan Duda and Nancy Price (781) 534-8543

BCI Financial Corp.

Timothy Rourke (860) 302-7127

Bellavia Blatt

Leonard Bellavia (516) 873-3000

Broadway Equipment Company

Fred Bauer (860) 798-5869

Brown & Brown Dealer Services

Jason Bayko (508) 624-4344

Cambridge Trust

David Sawyer (617) 620-3484

CBIZ

Nichole Rene (203) 781-9690

CDK Global

Rob Steele (508) 564-1346

Clifton Larson Allen

Rick Parmelee (860) 982-9307

Cooperative Systems

Scott Spatz (860) 250-4965

Cox Automotive

Polly Penna (303) 981-1298

Creative Resources Group

Charlie Rasak (508) 726-7544

CVR

John Alviggi (267) 419-3261

Dave Cantin Group

Woody Woodward (401) 465-7000

Dealer Alchemist

Jeremy Wilson (804) 564-5740

Dealer Pay

Shannon Wischmeyer (636) 293-8038

Downey & Company

Paul McGovern (781) 849-3100

DP Sales Distributors

Andrew Prussack {631) 842-7549

Driving Dealer Performance

Kimberly Guerin (978) 760-0322

EasyCare New England

Greg Gomer (617) 967-0303

Electric Supply Center

Jennifer Williams (781) 265-4272

Ethos Group, Inc.

Drew Spring (617) 694-9761

F&I Direct

Sean Wiita (508) 414-0706

Michelle Salas (508) 599-0081

Federated Insurance

Kevin Sundberg (559) 547-9694

Fisher Phillips LLP

Joe Ambash (617) 532-9320

Jeff Fritz (617) 532-9325

Josh Nadreau (617) 532-9323

Freedom Solar Power

Ryan Ferrero (970) 214-4433

GW Marketing Services

Gordon Wisbach (857) 404-0226

Hilb Group

James Pietro (508) 791-5566

Huntington National Bank

Mark Flibotte (781) 724-3749

iHeart Media

Paul Kelley (757) 328-1431

JM&A Group

Chris “KC” Hwang (954) 415-6961

JM Electrical Co.

Christopher Cedrone (781) 581-3328

John W. Furrh Associates Inc.

Pamela Barr (508) 824-4939

Key Bank

Tom Flynn (716) 998-6247

KPA

Abe Cohen (503) 902-6567

M & T Bank

John Federici (401) 642-5622

McWalter Volunteer Benefits Group

Shawn Allen (617) 483-0359

Merchant Advocate, LLC

Dan Giordano (973) 897-2778

Mintz Levin

Kurt Steinkrauss (617) 542-6000

Murtha Cullina

Thomas Vangel (617) 457-4000

Nancy Phillips Associates, Inc.

Nancy Phillips (603) 658-0004

National Business Brokers

Peter DiPersia (603) 881-3895

National Grid

Nicole Caruso-Carlin (347) 426-6331

NEAD Insurance Trust

Charles Muise (781) 706-6944

Northeast Dealer Services

Johna Cutlip (401) 243-7331

OCD Tech

Michael Hammond (844) 623-8324

Performance Brokerage Services

Jacob Stoehr (847) 323-0014

Performance Management Group, Inc.

Dale Ducasse (508) 393-1400

Piper Consulting

Jim Piper (207) 754-0789

Plug In America

Joel Levin (237) 925-1364

Portfolio

J. Gregory Hoffman (800) 761-4546

Priority Payments Local

Andrew Pollina (732) 372-4352

Pullman & Comley LLC

James F. Martin, Esq. (413) 314-6160

Reynolds & Reynolds

Austin Ziske (802) 505-0016

Rockland Trust Co.

Joseph Herzog (508)-830-3241

Santander Bank

Richard Anderson (401) 432-0749

Chris Peck (508) 314-1283

Schlossberg, LLC

Michael O’Neil, Esq. (781) 848-5028

Shepherd & Goldstein CPA

Ron Masiello (508) 757-3311

Southern Auto Auction

Joe Derohanian (860) 292-7500

Sprague Energy

Steve Borelli (508) 768-5252

The Towne Law Firm P.C.

James T. Towne, Jr. (518) 452-1800

TrueCar

Lauren Bailey (703) 909-1625

Truist

Andrew Carmer (401) 409-9467

Twelve Points Wealth Management

Taylor Duffy (978) 318-9500

US Bank

Vincent Gaglia (716) 649-0581

Wells Fargo Dealer Services

Rich DeFreitas (857) 205-2780

Withum

Kevin Carnes (617) 471-1120

Zurich American Insurance Company

Steven Megee (774) 210-0092

Dealers Convene for Annual Meeting

By Robert O’Koniewski, Esq.

MSADA Executive Vice President

rokoniewski@msada.org

Follow us on X (formerly Twitter) • @MassAutoDealers

Each year probably the most important event for your Association is our Annual Meeting of the Members. At that time, our member dealers and associate members convene as a group and set aside their competitive spirits for a few hours. We do this to listen to a roster of interesting speakers offering varied perspectives on our industry and the current political atmosphere. We also enjoy the camaraderie of our fellow businessmen and women facing the shared challenges today’s economic and political climates present to us. For this one event, we all can truly say we are united as a body to promote the franchised auto dealer system.

On Friday, November 1, your Association convened its Annual Meeting at the Encore Boston Harbor Hotel and Casino in Everett – a fantastic venue that matches the quality and allure of its sister facility in Las Vegas.

This year we had a successful turnout of members, and attendees heard from a diverse group of speakers, including:

• Your MSADA President, Jeb Balise;

• Massachusetts NADA Director Scott Dube;

• Lt. Governor Kim Driscoll, our featured speaker;

• Mark Strand, Senior Director, Economic and Industry Insights, at Cox Automotive, provided an economic outlook for the short- and long-term situations;

• The Registrar of Motor Vehicles, Colleen Ogilvie, provided an update on current happenings at the RMV and answered questions from dealer attendees regarding various matters. RMV COO Niren Sirohi and EVR Director Liz Rizzuto also spoke;

• Shean Kirin, Founder/CEO, Dealer Alchemist, presented on “Revitalize Your Reach – A Proactive Marketing Strategy for Auto Dealers”;

• Jeff Latessa, Stakeholders Liaison Officer for the IRS, and John Fitzmaurice, Mass. MOR-EV

Program Outreach Specialist for Dealerships, did a joint presentation, “Tax Incentives for Clean Vehicles”;

• Don Giordano, Business Development, Merchant Advocate, with whom MSADA has an executed endorsement agreement for assisting dealers in addressing credit card costs and fees;

• Richard Parmelee, CPA, Principal at CliftonLarsonAllen, presented on “Upcoming Tax Law Changes – Start Your Planning Today”;

• Shawn Allen of McWalter Benefits Group, spoke on “Reducing Health Care Costs at Your Dealership”;

• Steve Borelli, energy portfolio manager at Sprague Energy, an MSADA endorsed partner, presented on “Take Control of Your Dealership’s Energy Costs”;

• Ryan Ferrero, solar energy expert on auto industry electrification at Freedom Solar, spoke on “Micro-Gridding Your Dealership”; and

• I gave a government affairs report on several legislative and regulatory matters dealers should be aware of for the end of 2024 and heading into 2025. Following the meeting, attendees adjourned to our cocktail reception sponsored by Downey & Company to refresh and rejuvenate before hitting the Encore’s restaurants and gaming tables. We cannot have such successful events without the strong support of our sponsors. We owe a huge “thank you” to this year’s event sponsors:

• ACV Auctions – Bronze Sponsor

• Arent Fox Schiff – Gold Sponsor

• Armatus Dealer Uplift – Silver Sponsor

• Bank of America – Platinum Sponsor

• Cambridge Trust – Bronze Sponsor

• CliftonLarsonAllen – Platinum Sponsor

• Cooperative Systems – Silver Sponsor

• Cox Automotive – Platinum Sponsor

• CVR – Welcome Gift Sponsor

• DealerPay – Silver Sponsor

• Downey & Company – Cocktail Reception Sponsor

• GW Marketing Services – Bronze Sponsor

• Huntington Bank – Silver Sponsor

• McWalter Volunteer Benefits Group –Bronze Sponsor

• Merchant Advocate – Gold Sponsor

• Murtha Cullina LLP – Break Station Sponsor

• OCD Tech – Bronze Sponsor

• Performance Brokerage Services – WiFi Sponsor

• Reynolds & Reynolds – Silver Sponsor

• Santander – Silver Sponsor

• Sprague Energy – Platinum Sponsor

• TrueCar – Diamond Sponsor

• Withum – Gold Sponsor

• Zurich – Welcome Reception Sponsor

Check out more from our annual meeting on page 16.

Elections 2024

Tuesday, November 5 – Election Day –the day which would decide who would occupy the White House for the next four years and which party would control the U.S. House of Representatives and Senate for the next two. Pundits were predicting toss-ups on all three.

Come dawn of the following morn, clarity emerged to show that the 45th President of the United States – Donald Trump – was to become the 47th President of the United States, with the Senate flipping to Republican control, as the GOP picked up four Democrat-held seats and lost no sitting incumbents on the way to a 53-47 majority. The House, on the other hand, took a little bit longer to figure out, as the GOP held onto a lead – albeit a continuation of the current thin margin – to eventually get past the 218-hump needed to secure claim on the Speakership.

Here in Massachusetts, Sen. Elizabeth Warren vanquished her Republican opponent, and all nine House Democrat representatives were returned to office, seven of them not facing any opposition on election day.

As for our State House, all 200 seats –160 House and 40 Senate – were on the

November 5 ballot. But what is becoming a national embarrassment, Massachusetts voters were presented with the least competitive electoral prospects in the country for the fifth consecutive election cycle, and in six out of the last eight, based on an analysis conducted by Ballotpedia.

Given the lack of competition, the Democrats were in no danger of losing their super-majority in either chamber. (The Democrats presently hold the corner office; Gov. Maura Healey does not stand for re-election until 2026.) Democrats were on the ballot in 38 out of 40 Senate districts and 142 out of 160 House districts this time around, while Republicans challenged only 13 Senate districts and 47 House districts. Just 29 House districts and 11 Senate districts featured both a Democrat and a Republican, a 20 percent rate that was the lowest in the country.

One contributing factor to the lack of overall GOP challengers was strategic – a financially strained state GOP focused its resources on a number of specifically targeted seats in which it believed to have a real chance of winning.

To a degree that strategy paid off as the GOP Senate caucus grew to five as Kelly Donner beat Joe Pacheco in an open Taunton-based Senate district that was held by a Democrat for over 25 years. Two sitting GOP incumbents won re-election, including Peter Durant who flipped an open Democrat seat earlier this year in a special election. The other two GOP senators ran unopposed.

On the House side, after all is said and done, the chamber mix will remain the same – 134 Democrats, 25 Republicans, and one independent. However, as no sitting GOP incumbent lost, two Democrats did claim victory in open House seats currently held by retiring Republicans, and two other GOP candidates won in districts now or recently held by Democrats. One of the Republican wins included a victory over long-time incumbent Rep. Patricia Haddad, who several years ago once served as the Speaker Pro Tempore under former House Speaker Robert DeLeo.

Once all the counting was complete, the Massachusetts GOP chairwoman was hap-

py to point out that, with the party flipping three Democrat seats this time around, in the previous 40 years only one GOP candidate had turned a legislative district during a presidential election: William Crocker won a House seat on Cape Cod in 2016 which had been a Democrat seat for 20 years.

As for the man who will retake the country’s helm on January 20, 2025, Trump, like he did in every county around the country, expanded his share of the vote throughout the Commonwealth. Where Vice President Harris fell short of President Biden’s numbers from 2020, Trump received about a half-million more votes to increase his share to 36.4 percent, including leading in at least 80 of the state’s 351 cities and towns.

According to The State House News Service, “Much of Trump’s support here came from Southeastern Mass., Hampden County, and the semicircle of towns to the south and west of Worcester. The town that leaned most heavily in Trump’s favor was Acushnet, where about 72 percent of the more than 8,000 voters there supported the Republican.

“Between his 2020 defeat and this year’s national victory, Trump appears to have improved his standing with voters in practically every Massachusetts city and town. In Boston alone, the Republican went from 15.38 percent support in the 2020 contest to 20.4 percent support in 2024, according to the AP. His vote share also increased this year in the four next most populated municipalities: Worcester (from 29.4 percent in 2020 to 34.8 percent this year), Springfield (from 24.93 percent four years ago to 32.2 percent in 2024), Cambridge (from 6.39 percent in 2020 to 8.6 percent in 2024), and Lowell (from 31.67 percent in 2020 to 37.2 percent in 2024).

“Trump also appears to have flipped nearly two dozen Massachusetts towns he lost in 2020, including a cluster around Worcester (Sutton, Uxbridge, Webster, Millbury, Northbridge, West Brookfield, Rutland, Barre, and Hardwick), a pair of towns in northern Worcester County (Athol and Orange), a grouping of South Shore towns (Hanover, Pembroke, Rockland, Whitman, Bridgewater, and Raynham), and a few on

the roundu P

the South Coast (Fall River, Westport, and Somerset). North of Boston, Trump flipped Saugus, Lynnfield, and Salisbury into his column from four years ago.

“Harris performed best in Suffolk and Middlesex counties, racking up 76.9 percent of the votes cast in Boston, 87.6 percent from Cambridge, and 84.4 percent in Somerville. Cape Cod also went for the Democrat, with support ranging from as much as 91.4 percent in Provincetown to a more narrow 51.9 percent support in Bourne. The college towns of Hampshire County and rural towns of Franklin County also voted overwhelmingly for the Vice President, with Harris taking 87.9 percent of the vote in Amherst and 85.2 percent in Northampton.”

Finally, Massachusetts voters decided five ballot questions:

• Question #1: State Auditor’s authority to audit the Legislature – Approved

• Question #2: Elimination of MCAS as high school graduation requirement –Approved

• Question #3: Unionization for transportation network drivers – Approved

• Question #4: Limited legalization and regulation of certain natural psychedelic substances – Rejected

• Question #5: Regulating how tipped service workers were to be paid minimum wage – Rejected

Here is a list of the incoming legislators – three new senators-elect and 19 new representatives-elect – for the 2025-2026 session starting on January 1 (based on information from The State House News Service):

SENATE

• Kelly Dooner (R), Taunton: A Taunton City Councilor, Dooner won a close Senate race to flip the district held for more than three decades by retiring Democrat Sen. Marc Pacheco. She will become the first Republican woman in the Massachusetts Senate since Jo Ann Sprague, who left office in 2004. Dooner said she wants to reduce the state’s 6.25 percent sales tax to 5 percent, opposes open road tolling, and sharply criticized the state’s approach to sheltering migrants.

• William Driscoll (D), Milton: Driscoll is one of two state representatives who

will move down the hall for the new term. He spent four terms in the House, and currently co-chairs the Joint Committee on Emergency Preparedness and Management. Driscoll won a three-way Democratic primary for the open Senate seat, which Sen. Walter Timilty (D) is vacating and then did not face an opponent in the general election.

• Dylan Fernandes (D), Falmouth: Like Driscoll, Fernandes joined the House in 2017, and like Driscoll, he is now trading that job for the Senate. He defeated a Republican colleague, Rep. Mathew Muratore, to keep in the Democrat column the Senate district currently represented by departing Sen. Susan Moran. Fernandes spent this term as Vice Chair of the Legislature’s Environment and Natural Resources Committee.

HOUSE

• Michelle Badger (D), Plymouth: Badger’s win was one of four partisan seat flips in the House, which effectively canceled each other out and left the chamber with the same Democrat-Republican split (134-25-1) as the beginning of the current term. She beat Republican Jesse Brown in the race to succeed GOP Rep. Mathew Muratore. Badger chairs the Plymouth School Committee, and she works as Vice President of institutional advancement at Massasoit Community College. Her priorities include making higher education more affordable, creating more housing units, and expanding access to mental health care.

• Leigh Davis (D), Great Barrington: The westernmost communities of Massachusetts have a new state representative for the first time in more than two decades. Davis defeated independent candidate Marybeth Mitts and will succeed Rep. Smitty Pignatelli of Lenox, who first joined the House in 2003. She’s a member of Great Barrington’s Select Board, and she works as communications director at affordable nonprofit Construct. Before she settled in Massachusetts, Davis was a film and television editor in Los Angeles and department chair of the film and television program at the Galway-Mayo Institute of Tech-

nology in Ireland. She pledged to fight for improvements to boost housing affordability and transportation connections, including East-West Rail, and to invest in renewable energy and decarbonization efforts.

• Dennis Gallagher (D), Bridgewater: In another flip, Gallagher eked out a win over Republican Sandra Wright for the district now held by retiring GOP Rep. Angelo D’Emilia. The U.S. Navy veteran works as director of the town of Braintree’s retirement system, and he previously served as a town councilor in his hometown of Bridgewater. On his campaign site, Gallagher said he would not focus on “partisan politics,” and listed unspecified changes to the so-called right to shelter law and more funding for roads, bridges, and sidewalks as priorities.

• John Gaskey (R), Carver: Alongside Tara Hong, Taskey is the only other representative-elect to unseat an incumbent. In the September primary, he defeated Rep. Susan Williams Gifford, who died October 22 from cancer. A Coast Guard veteran, Gaskey made immigration the central theme of his campaign, saying on his website he wants to direct local law enforcement to cooperate with federal immigration authorities, “end the sanctuary status of Massachusetts and return our shelters back to its veterans and citizens.”

• Homar Gomez (D), Easthampton: Gomez is one of the two newcomers with a route to the Legislature that essentially could not have been easier: he was the only candidate to make the ballot in both the primary and general elections. Gomez, who will succeed Rep. Daniel Carey, was first elected to the Easthampton City Council in 2017, and he has been the council president since 2022. He was born and raised in Puerto Rico. His top issue areas are economic growth and job creation, education and youth development, health care, and “environmental stewardship.”

• Tara Hong (D), Lowell: Hong will enter the Legislature with two accolades: at the age of 24, he will become the youngest member of the House, and he is one of only two newcomers to defeat a sitting in-

cumbent en route to the 2025-2026 term. The Lowellian defeated Rep. Rady Mom in the primary, and he cruised against unenrolled candidate David Ouellette in the general election. Hong pledged during the primary cycle to prioritize constituent services and to increase transparency on Beacon Hill, including by making all votes public records.

• Hadley Luddy (D), Orleans: Similar to Gomez, Luddy strolled to his House win without even encountering an opponent. She spent the past eight years as CEO of the Homeless Prevention Council on Cape Cod, during which the organization grew fivefold to support more than 2,300 local residents with housing needs, according to her campaign. Luddy also chairs the Barnstable County Regional Network on Homelessness Policy Board, and she previously worked for Big Brothers Big Sisters of Cape Cod & the Islands and Community Connections. She described housing as the “number one threat to the financial stability of our community,” and also called for action to boost access to affordable child care, improve wastewater infrastructure, and expand clean energy options.

• Thomas Moakley (D), Falmouth: Moakley held for Democrats the House district that Fernandes gave up to challenge for Senate. He is an Assistant District Attorney for the Cape and Islands and has prosecuted cases in Martha’s Vineyard Juvenile Court and Edgartown District Court. Moakley said on his campaign site that he is “particularly proud” of working with District Attorney Rob Galibois to establish the Vineyard’s first Recovery Court, “which addresses the root cause of repeat offenders struggling with addiction and represents a holistic approach to public safety.” After defeating Arielle Reid Faria in the primary, Moakley did not face an opponent in the general election.

• Bridget Plouffe (D), Brockton: Plouffe won a three-way race for the seat that her longtime boss, Democrat Rep. Gerard Cassidy is giving up. She began working for Cassidy in 2016 as an aide and rose to chief of staff. Now, she is chief of staff

for the Veterans Affairs Committee that Cassidy co-chairs. One of her self-described top priorities is reinforcing the state’s health care system, and Plouffe warned that her region has been “ground zero” for upheaval following the temporary closure of Brockton Hospital and the Steward Health Care collapse. “If elected I plan to get to work right away to figure out a plan to ensure that what has happened with Steward cannot happen again while also ensuring that Boston Medical Center, the new owner of Good Samaritan, is accountable to the local residents who depend on their care,” she wrote.

• Sean Reid (D), Lynn: Reid is familiar with Beacon Hill: he works as legislative director for Sen. Brendan Crighton of Lynn. Now, he will get a chance to represent most of Lynn and all of Nahant himself after winning a Democratic primary and cruising through the general election with no opponent. Reid is a member of the Lynn School Committee, and he also serves on the boards of the YMCA of Metro North and My Brother’s Table. Some of his priority topics are housing and public transportation, climate and coastal resiliency, and addressing the opioid crisis.

• Amy Sangiolo (D), Newton: Sangiolo is one of two former Newton City Councilors who are about to join the Legislature. She spent 20 years on that elected panel, and, in 2022, she co-founded the community news platform Fig City News. Sangiolo now works in the attorney general’s office assisting Bay Staters facing eviction and foreclosure. After a landslide win in the primary, Sangiolo easily defeated Republican Vladislav Yanovsky in the general. She identified housing, public transportation, gun violence prevention and criminal justice, among others, as top areas of focus.

• Greg Schwartz (D), Newton: Another former Newton City Councilor, Schwartz spent eight years on the panel, partly overlapping with his now soon-to-be-legislative colleague Sangiolo. He has been a primary care physician for nearly 25 years and points out that he will be the only medical doctor in the Legislature. Schwartz topped a three-way Democrat-

ic primary to succeed Rep. Ruth Balser, whose endorsement he earned, and then did not have a general election opponent.

• Ken Sweezey (R), Pembroke: Sweezey will give the Sixth Plymouth District its first House representation in nearly a year, and its first Republican in more than a decade. He defeated Democrat Rebecca Coletta to flip the district last represented by Rep. Josh Cutler, who resigned from the House seat in February to take a job in the Healey administration. Sweezey worked as a fingerprint examiner for the St. Louis Metropolitan Police Department and now works at a local biotech company, SPT Labtech. Sweezey touted a plan to rein in state spending on shelters by creating a residency requirement, and he argued that the MBTA Communities Law “poses a threat to many of our communities.”

• Mark Sylvia (D), Fairhaven: Sylvia, who won the race to succeed longtime South Coast Rep. William Straus, will arrive with experience in the public sector. He spent four years as town manager in Plymouth and served as an energy undersecretary in the Patrick administration. For the past nine years, he has worked at solar and battery storage developer BlueWave, first as managing director and then as chief of staff. He highlighted affordability concerns as a major issue plaguing families across the state, and said he would work to protect reproductive rights.

• Josh Tarsky (D), Needham: Tarsky’s resume stretches across the military, education, and legal worlds. He works today as principal of the Holbrook Middle-High School, and he is also a judge advocate general (JAG) for the Massachusetts National Guard. Soon after the September 11, 2001, terrorist attacks, Tarsky joined the U.S. Army and received honors for his service in Operation Enduring Freedom. He will succeed Rep. Denise Garlick in the House. Tarsky’s priorities include allowing districts to ban cellphones in schools, boosting incentives for using public transit, providing developers with incentives to build new green, middle-class housing, and “improving political discourse.”

the roundu P MSADA

• Justin Thurber (R), Somerset: In one of the biggest Election Day surprises, Thurber toppled 12-term Rep. Patricia Haddad (D) to flip the district that grazes the Rhode Island border. Thurber is an Air Force veteran whose top priorities include immigration, “parental rights in education and health decisions,” and education. He also campaigned aggressively against the onetime Speaker Pro Tempore -- his website has a tab titled “Haddad’s voting record.”

• Richard Wells (D), Milton: When Rep. Driscoll shifts to the Senate, Wells will step into his House seat. He will add to the Legislature’s law enforcement ranks after spending more than three decades with the Milton Police Department, including nine years as its chief. Wells has been a member of the Milton Select Board for seven years and has served as its chair since May.

• Michael Chaisson (R), Foxborough: Chaisson won one of the closest races this cycle, appearing to edge out Democrat Kostas Loukos to keep the seat being vacated by Rep. Jay Barrows in Republican hands. He owns Chaiss Construction, which focuses on residential remodeling, and sits on Foxborough’s Advisory Committee, which provides reports to Town Meetings about budgetary items and other municipal issues. Chaisson during his campaign called out “rising costs and reckless spending on Beacon Hill,” and listed the state’s response to a sharp increase in migrants seeking shelter here as one of his top priorities.

• Steven Ouellette (D), Westport: [Recount Pending] Ouellette, who is currently Vice Chair of the Westport Select Board, emerged from the most crowded field of the general election by narrowly defeating Republican Christopher Thrasher and three independent candidates. But there is still a chance the outcome changes: down by 143 votes, Thrasher said he plans to pursue a hand recount in the Eighth Bristol District’s five communities. They’re vying for an open district held by Rep. Paul Schmid, who opted against seeking reelection.

Auto Body Labor Rates Review Process Moves to Governor

When the Legislature completed its formal sessions well past the midnight deadline of July 31 this year, it had not taken action on at least 10 of a dozen major matters still on its plate, incurring the wrath of the media, citizens groups, and advocacy organizations who had vested interests in those items. •

Deciding to ignore its own rules, legislative leaders in both chambers decided to set aside their differences and work on these lingering bills to seek some level of common ground that could be approved and sent to the Governor. It was an ambitious plan, given that the Legislature would need to suspend various rules and come back into session to hold roll calls to pass any controversial bills, but made easier by a lack of a substantial GOP caucus that really could do very little to derail any legislative effort.

Internal negotiations took place throughout the Summer and past the September 9 primary election. In the end, one legislative piece of interest to us did emerge – the House and Senate cobbled together a 319page Economic Development conference committee agreement which includes the creation of a 14-person advisory board, including a member selected by MSADA, to review the auto body labor rates matter and report its findings and recommendations to the Legislature and the Division of Insurance by December 31, 2025.

Dealers with auto body shops have suffered for decades from a repressed reimbursed labor rate at the hands of the insurance companies for insurance-paid repairs. We have been a part of two special legislative commissions that reviewed this issue, the most recent completed its work in April 2022. During the 2022 and 2023 budget processes, Senate language supporting the body shops did not make it through budget conference committees.

This time around, the Senate language has stuck. The legislation – section 292 of House 5100 – has been sent, on November 15, to the Governor, who has ten days to review the bill and sign it. We will keep you posted as developments occur.

Our PACs - NADAPAC

& NCDPAC

We appreciate the contributions we receive from our member dealers who answer our calls for donations to our PACs.

Each year MSADA expresses itself politically through NADA’s federal PAC, NADAPAC, and through our state PAC, the New Car Dealers Political Action Committee (NCDPAC). We depend on contributions from our dealers to keep these PACs strong, as we need to have an active voice in Washington and on Beacon Hill. Contributions to our PACs are an inexpensive insurance policy. Since by law we cannot use our membership dues or other association revenues for political contributions, the PACs help us to remain strong politically as we advocate for our dealers’ interests in the political process.

Even though we are past Election Day, legislators will continue to hold fundraisers through to the end of the year, either to pay off campaign debts or squeeze out dollars not yet donated in the calendar year. Since their requests never cease, neither will our PAC fundraising.

If you have not yet given to the PACs this year, please contact me at rokoniewski@msada.org and we can make sure your contributions happen. Thank you.

Next “Coffee with Coopsys” Webinar – Dec. 10

Our “Coffee with Coopsys” webinar series from our associate member, Cooperative Systems, continues with our next instalment on December 10. Coopsys works with businesses to increase their IT knowledge and understanding. The “Coffee with Coopsys” program is a series of brief webinars we provide to our members to expand upon and improve their experiences regarding IT issues and dealership best practices.

Our final “Coffee” webinar for 2024 is scheduled for Tuesday, December 10, at 10:00 a.m.: What Is A CISO And Why Does My Dealership Need One?

You can register at https://coopsys.com/ msada/.

EGISLATIVE S CORECARD

NOVEMBER 2024

BILL# SPONSOR SUBJECT

S151

H331

H290

H329

S204

H270

H289

S150

H351

Sen Crighton Rep Hunt

Rep Finn

Rep Howitt

Sen O’Connor

Rep Chan

Rep Finn

Sen Crighton

Rep Lewis

Amendments to Ch. 93B, the auto dealer franchise law.

RTR law amendments to fix Model Year start date and consumer notice.

Creates process to appeal improperly issued Class 1 license.

Modernize on-line vehicle purchase process.

S199 Sen Moore Amends definition of heavy-duty trucks in RTR law.

S220 H400 Sen Velis Rep Walsh Open safety recalls notifications.

H354 Rep Linsky Allows an OEM to open a factoryowned store, without a dealer, if there is no same line-make dealer in the state.

(The so-called “Tesla Exemption.”)

Joint Committee on Consumer Protection held public hearing on July 17, 2023; placed into study.

Joint Committee on Consumer Protection held public hearing on July 17, 2023; placed into extension order.

Joint Committee on Consumer Protection held public hearing on July 17, 2023. H270 reported favorably on Jan. 25, 2024; sent to House Ways and Means.

Joint Committee on Consumer Protection held public hearing on July 17, 2023. H351 reported favorably on Jan. 25, 2024; sent to House Steering & Policy Committee; House ordered to third reading on 2/12/24.

SUPPORT Joint Committee on Consumer Protection held public hearing on July 17, 2023; placed into extension order.

SUPPORT Joint Committee on Consumer Protection held public hearing on July 17, 2023. Redraft H4277 reported favorably on January 25, 2024; sent to House Ways and Means.

OPPOSE Joint Committee on Consumer Protection held public hearing on July 17, 2023; placed into study.

S688

H1095

H1118

S639

H1121

H995

Sen Moore

Rep McMurtry

Rep Philips

Sen Feeney

Rep Puppolo

Rep Donahue

Creates process to increase the insurance reimbursed labor rate paid to auto body repairers.

Protects consumer choice in vehicle service contracts.

S2219 H3255 Sen Cronin Rep Arciero Eliminates initial state inspection for new vehicle.

Joint Committee on Financial Services held public hearing on October 3, 2023; reported redraft H4412 favorably and sent to House Ways and Means.

Joint Committee on Financial Services held public hearing on October 3, 2023; H995 reported favorably and sent to House Steering & Policy Committee.

SUPPORT Joint Committee on Transportation held public hearing on Jan. 24, 2024; placed into study.

H3348 Limit doc prep fee amounts. OPPOSE Joint Committee on Transportation held public hearing on Jan. 24, 2024; reported favorably and sent to House Ways and Means Committee. Rep Howitt

S2210

Sen Crighton

Sen Creem Rep Carey

Safety shutoff for keyless ignition technology.

Joint Committee on Transportation held public hearing on October 17, 2023; reported favorably.

S25 H60 Personal data privacy and security. OPPOSE Joint Committee on Advanced Information Technology, the Internet and Cybersecurity held public hearing on October 19, 2023. On 5/13/24, Committee reported redrafts S2770 and H4632 favorably; each sent to respective Ways and Means committee.

S227 Sen Finegold Mass. Info Privacy & Security Act. OPPOSE Joint Committee on Economic Development and Emerging Technologies held public hearing on October 19, 2023. Bill sent to AITIC Committee on November 2, 2023.

S171 H311 Sen Feeney Rep Gonzalez Protect consumers in auto transactions. OPPOSE Joint Committee on Consumer Protection held public hearing on July 17, 2023; reported S171 favorably on 1/25/24 and referred to Senate Ways and Means. SWM reported redraft S2736 favorably on 4/22/24. Senate engrossed on 4/25/24.

AUTO OUTLOOK

ANNUAL MEETING

2024

Following a casual luncheon sponsored by Zurich to start the day, MSADA President Jeb Balise and MSADA Executive Vice President Robert O’Koniewski kicked off the speakers’ lineup highlighted by a keynote address from Massachusetts Lieutenant Governor Kim Driscoll.

Gathered in the Picasso Rooms of the Encore Hotel and Casino in Everett on November 1, your MSADA, celebrating its 84th year representing franchised new-car and truck dealers, convened its Annual Meeting of the Members that included a slate of speakers representing all facets of the auto industry.

Robert O’Koniewski

MSADA Executive Vice President

Jeb Balise Balise Auto Group, MSADA President

vehicle MaRKet uPDate anD

OutlOOK

Mark Strand

Cox Automotive – Senior Director, Economic and Industry Insights

naDa RePORt

Scott Dube

McGovern Hyundai Rt. 93, Massachusetts

NADA Director

Revitalize YOuR

Reach – a PROactive MaRKeting

StRategY fOR autO DealeRS

Shean Kirin Founder/CEO – Dealer Alchemist

uPcOMing tax law changeS – StaRt YOuR Planning tODaY”

Richard Parmelee

CPA – Principal, CliftonLarsonAllen

tax incentiveS fOR clean vehicleS

Jeff latessa

IRS – Stakeholders Liaison Officer

John fitzmaurice

Mass. MOR-EV Program, Dealership Outreach Specialist

18 2024 ANNUAL MEETING

RMv uPDateS

colleen Ogilvie Registrar, Massachusetts Registry of Motor Vehicles

the Silent equitY

PaRtneR YOu neveR

Knew YOu haD

Don giordano

Business Development, Merchant Advocate

MaSSachuSettS lieutenant gOveRnOR

Kim Driscoll

MicRO-gRiDDing YOuR DealeRShiP

Ryan ferrero

Freedom Solar – National Director, Auto Industry

Electrification

taKe cOntROl Of YOuR DealeRShiP’S eneRgY cOStS

Steve Borelli Energy Portfolio Manager, Sprague Energy

ReDucing health caRe cOStS at YOuR DealeRShiP

Shawn allen Managing Principal, McWalter Benefits Group

The day concluded with cocktails and light fare sponsored by Downey & Company as a prelude to attendees’ hitting the Encore’s restaurants and gaming tables that evening.

MSaDa annual Meeting 2024 SPOnSORS

DiaMOnD SPOnSOR TrueCar

PlatinuM SPOnSORS Bank of America

Clifton Larson Allen Cox Automotive Sprague Energy

gOlD SPOnSORS

Arent Fox Schiff Merchant Advocate Withum

SilveR SPOnSORS

Armatus Dealer Uplift

Cooperative Systems DealerPay

Huntington Bank

Reynolds & Reynolds Santander

BROnze SPOnSORS

ACV Auctions

Cambridge Trust

GW Marketing

McWalter Benefits Group

OCD Tech

welcOMe RecePtiOn SPOnSOR

Zurich

welcOMe gift SPOnSOR

CVR

BReaK StatiOn SPOnSOR Murtha Cullina

cOcKtail RecePtiOn SPOnSOR Downey & Co.

wi-fi SPOnSOR

Performance Brokerage Services

NEWS from Around the h orn MSADA

HOLYOKE

Gary Rome Hyundai Hosts annual Trees of Hope Event

Ronald McDonald House of Springfield is holding its Fourth Annual Trees of Hope holiday celebration from November 8-22 at Gary Rome Hyundai in Holyoke.

Trees of Hope is a joyful fundraising event that provides vital support for the Ronald McDonald House of Springfield’s mission to bridge the gap between specialized medical care and children in need. Now in its thirty-third year, the Ronald McDonald House of Springfield continues to play a crucial role in facilitating access to essential medical treatment for children from near and far by providing lodging, meals, and daily essentials to families in need.

This year’s event showcases imaginative holiday trees, dream gifts, and displays generously donated by local businesses, individuals, and community organizations. The Gary Rome Hyundai showroom will be an amazing holiday wonderland. The event is a wonderful family holiday outing, and admission is free. Each display will be raffled off using an online system that allows both in-person and virtual participation.

“I’m so excited to welcome Trees of Hope back to the dealership,” says owner Gary Rome. “Ronald McDonald House of Springfield is an essential resource for families in need, especially during these challenging times. It is my hope that the community will join us in supporting this fantastic cause. After all, there’s no place like Rome for the holidays!”

Ronald McDonald House Charities of Connecticut and Western Massachusetts’ Chief Executive Officer, Michelle D’Amore,

says, “We are incredibly grateful to partner with Gary Rome and his team at Gary Rome Hyundai to ensure we continue serving every family that walks through our doors. We owe special thanks to our Presenting Sponsor, Hyundai Motor America, for their continued support of the Ronald McDonald House of Springfield.”

LEXINGTON Ray Ciccolo Hosts Gov. Healey Fundraiser

On October 21, Village Automotive Group’s Ray Ciccolo hosted a fundraiser for Gov. Maura Healey at his home in Lexington.

HADLEY

Country Nissan’s Heather Petricevich Named service advisor of the Year

Country Nissan is proud to announce that Heather Petricevich has been honored as the Service Advisor of the Year for the Chris Collins Top Dog Award, recognized nationwide within the Asian League. Heather recently returned from Los Angeles, where she received this prestigious accolade, celebrating her exceptional customer service, expertise, and dedication to excellence in the automotive industry.

“I am truly humbled and honored to receive this award,” said Petricevich. “This achievement is a reflection of the incredible support from my team and the wonderful relationships I have built with our customers. I’m passionate about providing the best service possible, and I’m grateful to work in such a supportive environment at Country Nissan.”

Heather’s recognition highlights her commitment to fostering

SUDBURY

Herb Chambers Unveils Enhanced Mercedes-Benz Facility

Herb Chambers recently announced the grand opening of its newly relocated and enhanced Mercedes-Benz dealership. Strategically designed with customers in mind, the new location at 141 Boston Post Road, Rte. 20, Sudbury, is six miles away from its previous home and promises to elevate the luxury automotive experience to new heights.

The dealership’s modern, sophisticated aesthetics include contemporary architecture featuring sleek lines, glass facades, and high-end materials that mirror the qualities of the Mercedes-Benz brand. Customers enter the dealership into a spacious showroom meticulously crafted to highlight multiple vehicles, allowing ample room for exploration and an up-close view of the latest models.

Luxurious waiting areas offer premium seating, complimentary refreshments, and entertainment options such as large-screen TVs and Wi-Fi access. Interactive digital displays throughout the showroom present a dynamic way for customers to explore various Mercedes-Benz models, configurations, and advanced features. This location is the ultimate in comfort and convenience for all Mercedes-Benz enthusiasts.

tailored consultations, informative vehicle demonstrations, and customized financing options to meet each guest’s unique needs with precision and care.

The dealership’s climate-controlled service center is equipped with advanced diagnostic tools and technology,

Herb Chambers prides itself on personalized service for buyers interested in a wide range of inventory, including the latest models, AMG performance cars, or certified pre-owned vehicles. The dealership’s dedicated team members provide

strong relationships with customers, ensuring their needs are met with the highest level of professionalism and care. Her dedication has made a significant impact not only on her clients but also on the entire Country Nissan family.

“Our team is incredibly proud of Heather,” said Chris Moreno, Service Manager at Country Nissan. “Her hard work, dedication, and exceptional customer service set a benchmark for excellence in our industry. She embodies the values we strive for at Country Nissan, and her achievement inspires us all to continue raising the bar.”

HOLDEN

sunnyside Ford shutting down after 100 Years

By Brett Foote, Ford Authority

In recent years, with inventory dropping to near record lows and prices rising to record highs for years amid the COVID-19 pandemic, we’ve seen more than one longtime Ford dealer close

capable of handling maintenance and repair needs for both passenger vehicles. The dealership strategically features an expansive 3-lane drive-in service reception area that will provide a welcoming area equipped to cater to the needs of the dealership’s growing service clientele. Master Certified technicians who specialize in Mercedes-Benz vehicles, upholding the highest standards of service excellence, will be on-hand to overcome even the most complex repairs exhibiting a true passion for their craft.

up shop, unfortunately. That list includes Hillier Ford in Escalon, California, which shut down last year after 50 years in business, as well as Worthington Ford in Southern California, a famous and beloved Ford dealer that rose to fame thanks to its humorous advertisements. Now, another Ford dealer has shut down after a full century in operation, too.

That dealer is Sunnyside Ford in Holden, Massachusetts, according to Spectrum News 1, a business that just celebrated 100 years of operation back in March. Sunnyside originally opened up as a service shop for the Model T and other vehicles way back in 1923, and, one year later, became a full-fledged Ford dealer. Unfortunately, changing times recently prompted President Dan Harrington to make the difficult decision to close a business that’s lived under the care of three generations of family ownership.

“It’s definitely been more complicated in the last 10 years or so, but I’m 74, so it’s time to retire,” said Harrington. “I remember the times, you know, you get in the car, you turn the key and boom, you forget your left gear and nothing jumps forward. Well, now they won’t do that on you. A lot of safety features that are

NEWS from Around the h orn

great, some are a pain, I know a lot of people don’t like them, but they’re for the benefit of everybody.”

Thus, Sunnyside Ford won’t live on to see a fourth generation of ownership, it seems, as its last day of operation will be November 22. It’s a sad and unfortunate end to a century-old business, but as we’ve seen on numerous occasions over the past couple of years, changing times have prompted several others to make similar decisions as well.

WASHINGTON, D.C.

auto dealer Groups to Challenge scout Motors’ decision to sell directly to Us Consumers

Reuters

Groups representing U.S. auto dealers said in October they plan to challenge a decision by Volkswagen’s Scout Motors to sell directly to consumers, bypassing independent retailers.

The National Automobile Dealers Association said it and state associations “will challenge this and all attempts to sell direct in courthouses and statehouses across the country.”

Scout had announced in mid-October it would join electric vehicle manufacturers like Tesla in forgoing a traditional independent dealer network in favor of directly selling and servicing vehicles, and it pledged full transparency on price and a speedy sales process.

Scout did not immediately respond to a request for comment.

NADA CEO Mike Stanton said the decision by VW “to attempt to sell Scout vehicles direct to consumers and compete with its U.S. dealer partners is disappointing and misguided, and it will be challenged.”

Scout Motors CEO Scott Keogh told Reuters that he expects the brand will have around three dozen U.S. retail centers when sales begin in 2027, eventually rising to 100. Other EV sellers like

Rivian and Lucid have direct sales models as well.

“I think it’s critical moving into the future in unstable environments to control your customer, control your margin, control your operational excellence,” Keogh said, referring to the direct sales plan.

State laws bar automakers with independent dealer networks from selling directly to consumers. Tesla has sued Louisiana, challenging its ban on direct vehicle sales to consumers.

Scout plans to begin producing up to 200,000 EV trucks and SUVs annually starting in 2027 from its $2 billion South Carolina plant, which is under construction. The automaker disclosed that it will offer extended-range variants that include a small gasoline engine.

CALIFORNIA

Toyota Executive Lashes Out at Us Regulations

Promoting EV sales

Bloomberg News

Toyota Motor Corp.’s North American chief operating officer criticized the US’s policies promoting speedy adoption of electric vehicles, calling them “de facto mandates” out of sync with consumer demand.

Noting government support for EVs has been a hotly debated issue in the US presidential election, Toyota North America COO Jack Hollis said sales of all-electric vehicle should grow organically, without rules penalizing gas-powered car sales.

“The whole EV ecosystem is ahead of the consumer,” Hollis told reporters, pointing to tailpipe emission rules from the Environmental Protection Agency and California. “It’s not in alignment with consumers. It’s just not.”

In March, the EPA set stringent emission limits that compel automakers to accelerate sales of battery-electric and plug-in hybrid models over the next few years to cap carbon dioxide at 85 grams per mile by 2032. That Joe Biden-Kamala Harris administration policy was a frequent target of President-elect Donald Trump in the run-up to the November 5 election.

California, the nation’s largest auto market, has even tougher regulations designed to phase-out all new gas-burning cars by 2035, and many states adopt these rules. Hollis, who also serves as Toyota’s US sales chief, said that they contribute to an affordability crisis because EVs tend to be pricier than gas-powered vehicles.

But he declined to speculate on whether Toyota would join any potential effort by the incoming Trump administration to block California’s zero-emission vehicle rules. “I hope it doesn’t come to that. That’s not an area I’m willing to go into” at this point, he said.

Toyota was among the last automakers to withdraw support for an effort under the first Trump administration to prevent California from continuing to set its own emissions standards.

NEWS from Around the h orn

Toyota plans to roll out a pair of American-made EVs in 2026 in addition to two all-electric models it currently sells in the US. That’s part of its incrementalist approach to an industrywide shift to EVs, sales of which have slowed globally.

Hollis said the Japanese company is mulling a possible future adjustment in the ratio of fully-electric to hybrid-electric batteries produced at a new plant in North Carolina. The facility, which is expected to open next year, was built with 10 production lines for batteries for fully-electric or plug-in models, and four lines dedicated to hybrid batteries.

MCLEAN, VIRGINIA

dealerships step Up during Breast Cancer awareness Month

NADA CommuNiCAtioNs

October was Breast Cancer Awareness Month, and dealerships across the country took action to help increase awareness and raise funds to find a cure. Since Breast Cancer Awareness Month first began in 1985, the ability for early detection and the likelihood of survival for this terrible disease have both drastically improved.

Despite the progress, there is still a long way to go, and local franchised dealerships are chipping in to make life easier for those impacted and raise money and awareness to better detect and treat

breast cancer. Here are just a few examples of how dealers are stepping up:

• R.M. Stoudt Ford in Jamestown, North Dakota, participated in the 16th annual Running of the Pink in Jamestown to raise money for women’s health programs. The dealership helped raise more than $50,000 in this year’s race.

• Brandon Tomes Subaru in McKinney, Texas, delivered 80 blankets to Cancer Center Associates as part of the Subaru Loves to Care program. These gifts were accompanied by personalized messages of hope written by the customers and staff at Brandon Tomes Subaru.

• Stan McNabb Chevrolet Cadillac in Columbia, Tennessee, wrapped their building in pink to help raise awareness for Breast Cancer Awareness Month. Stan McNabb wraps their building in pink every October to honor those who have been affected by breast cancer.

If you have any news regarding your dealership or auto group, including your charitable and community giving efforts, please email it to Auto Dealer at rokoniewski@msada. org.

Protecting Your Dealership from Vandalism and Year-Round Risk

By Barton Haag CPA, Albin Randall & Bennett

Having just gone through the witching season, we all know that not all Halloween tricks are harmless fun. October often brings a spike in vandalism, especially around Halloween, with pranks and mischief leading to costly damage. For automobile dealerships, vandalism is a yearround concern that can disrupt operations and hurt profitability. Preventing these incidents and addressing their financial consequences is critical for dealership owners.

Financial Risks

Dealerships that do not manage vandalism risks effectively may struggle with the negative financial ramifications. Vandalized inventory can require costly work before they can be sold. Graffiti or broken windows diminish a dealership’s appearance and impact its professional image. Frequent vandalism claims can raise insurance premiums and may lead to denied coverage.

Additionally, vandalism creates liability risks, especially with customer vehicles. Cars vandalized while at the dealership for service can result in legal disputes and strained client relationships. Safeguarding both dealership and customer property is essential to avoiding lawsuits and extra costs and maintaining a positive reputation.

Preventing Vandalism

To effectively mitigate the risk of vandalism, dealerships can implement a range of security measures designed to deter potential criminals and protect both their inventory and facilities, including:

• Surveillance Systems: Installing quality cameras covering all areas acts as both a deterrent and a tool to identify vandals.

• Physical Barriers: Fencing, gates, and re-

stricted access points make it harder for vandals to enter, especially after hours.

• Lighting: Bright, motion-activated lighting deters vandals who prefer to operate in the dark.

• Security Personnel: On-site or remote monitoring provides additional protection. Visible security measures discourage criminal activity.

These security measures may require a substantial upfront investment. The longterm benefits far outweigh the costs, as reducing the likelihood of vandalism is significantly less expensive than repeatedly repairing damaged inventory and facilities.

Insurance Coverage

When vandalism does occur, it calls for prompt action. Dealerships must immediately notify affected customers, provide transparent information about the damage, and outline repair options. That makes comprehensive insurance coverage essential. While Vandalism and Malicious Mischief (VMM) insurance typically covers intentional property damage, dealerships must ensure protection extends to both facilities and vehicles.

Commercial property policies often include vandalism coverage, but business owners should verify their specific terms. For customer vehicles, garage keepers’ liability insurance protects businesses like auto dealerships from financial losses by covering damages to customer vehicles while they are in the dealership’s care.

Selling Vandalized Vehicles

Vandalism can cause a range of damage, from minor cosmetic issues to irreparable harm, requiring dealerships to navigate the repair and sale processes carefully to ensure compliance with regulations. As MSADA has reported in the past, dealerships selling vandalized vehicles must comply with consumer protection laws, including the Used Car Warranty Law and the Lemon Law. These laws require dealerships to provide a written warranty for any used vehicle with fewer than 125,000 miles, covering defects that impair its use or safety. However, de-

fects from vandalism may not be covered if they don’t affect the vehicle’s fundamental operation or safety.

Massachusetts law prohibits selling vehicles “as-is,” meaning that even a vandalized car must meet operational standards. If the vandalism impairs the vehicle’s safety or use, the dealership must repair it under the warranty. Failing to disclose relevant damage or neglecting required warranty repairs can result in the buyer seeking arbitration or legal recourse through state consumer protection laws.

You Are Not in This Alone

Vandalism often is not confined to one business; it is a community-wide issue. Promoting a sense of mutual responsibility through strong relationships with the local community helps prevent vandalism. Dealership owners should participate in business networks and crime prevention programs to share information on suspicious activity. Neighbors and nearby businesses can work together to monitor potential threats.

If vandalism occurs, quick coordination with law enforcement and the community is key. Surveillance footage or eyewitness reports from nearby businesses can assist in identifying suspects. A united effort improves the likelihood of resolving the issue and holding vandals accountable. By looking out for each other, local businesses can reduce risk and create a safer environment where everyone is better positioned to thrive.

The Road Ahead

For automobile dealerships, vandalism presents financial, legal, and reputational risks. Investing in strong security measures, maintaining comprehensive insurance coverage, and building community relationships are key steps in reducing these risks. By taking a proactive approach, dealerships can protect their assets, preserve their reputation, and ensure long-term profitability. Consult with a financial advisor to make sure your business is properly protected this Halloween and throughout the year.

Taking On An Equity Investor Is A Great Growth Strategy

By Alysha Webb Withum Consultant

Buying a dealership requires much more capital than many dealers have access to through traditional channels. A growing number are partnering with investment firms that provide that capital to grow. Those firms often take an equity stake in the growing dealership group.

“We have seen a surge of interest in an equity investor,” says Stuart McCallum, a Withum partner and dealership services practice leader.

Such arrangements can be beneficial to both parties if the partnership is correctly structured. The right structure ensures even a dealer with one or two franchises can expand without taking on an unreasonable amount of risk.

An equity investor could shoulder $2 million of that $7 million, he explains. Now, the dealer only needs to contribute $2 million. “I may have that in used car inventory,” McCallum says. “Now, if I am successful, I still get the fruits, but if I fail it doesn’t kill me.”

Taking the Open Road

Dealers often bring Withum in to review the terms of the offered structure. Without a properly structured agreement, bringing on an equity partner might not kill a dealer, but it could weaken them financially. A well-structured agreement makes the arrangement a great way to grow stronger, however.

In a poorly structured agreement, a dealer could get hit with a huge tax bill

kinds of partnerships can help a small dealer grow. Halim owned several Chrysler Dodge Jeep Ram stores in California and wanted to acquire the Sierra Auto Group, which included a Honda, a Chevrolet, and a Subaru dealership in Monrovia, east of Los Angeles.

With just two CDJR stores, Halim was “maybe on his way to buying a third store but probably not,” says Batchelor. Certainly not the Sierra Auto Group.

So, Rinaldi contacted Open Road, which contributed cash to buy the three stores, taking a majority stake. It also took a majority stake in Rinaldi’s two CDJR stores.

Today, Sierra Auto Group has 11 rooftops including 14 franchises and a commercial truck center. Rinaldi used his own cash flow to buy more stores after he doubled the cash flow of the original three stores in a few months. “He has doubled his net worth as a result,” Batchelor says.

Given the rise in the amount of capital needed to buy the most desirable stores, bringing in outside capital will only become more attractive

Many of those interested in equity investment partners are first-time dealers looking to grow, McCallum says. The problem? Even the smallest dealership acquisition is going to require at least $7 million to get off the ground, McCallum says. “There are very few first-time buyers who have access to that.”

For a first-time buyer, coming up with that kind of capital to acquire another store represents an “existential risk,” he says. But not with an equity investor, who can allow a dealer to take a “reasonable” risk.

even though he or she did not pocket the cash, McCallum says. Withum can show the dealer the true value of the offer with a “waterfall analysis” that shows the waterfall of the profits based on who gets paid when in the capital structure.

Equity investment can take different forms depending on the client’s needs, says Tim Batchelor, co-founder and managing director of Open Road Capital. Open Road takes minority and majority stakes in dealerships.

Open Road’s partnership with Rinaldi Halim is a good example of how these

Crafting an “Eject Button”

For Open Road, there is a “big disparity” between good dealers and not good dealers. Before it partners with a dealer it does extensive due diligence to ensure that dealer is a good one. “Assets are important, but the partner is more important,” says Batchelor.

Before it invests in a dealership, Open Road assesses the potential partner to ensure he or she will fit well into Open Road’s collaborative company culture. A good partner has ethics and fairness in their perspective, says Batchelor.

Open Road spends a “good deal” of time with a potential partner before making an investment. And it asks questions

Bringing in an equity investor can help make owning that desirable store a reality.

in the industry. “There is almost nobody we can’t find out about by asking around,” says Batchelor.

That kind of carefulness is crucial because the major downside risk to the equity investment model is a mismatch between the two partners. Dealers like to be their own bosses, McCallum says. But once you invite an equity investor in, “you went from being single and now you are married and have a roommate,” he says.

No longer can a dealer have a good month and decide to buy a corporate jet. “You will get questions from your financial overlord,” McCallum says.

That is why including an “eject button” in an agreement is crucial. Withum has had to play marriage counselor more than once. McCallum recommends both parties agree to a mechanism that allows them to split up if absolutely necessary.

But the “eject button” must be designed so that one partner doesn’t unfairly benefit. For example, one partner could get bought out and the computation has that

partner getting paid a “ton of cash” while the other is now an operator with no money and a store that is a poor performer, McCallum says.

Family Dynamics

Open Road also works with family-owned dealerships where one or more family member wants to exit the business, and the other stakeholders need money to buy out the exiting shareholders. Open Road provides that capital. Then, another capital need arises – capital to buy more stores. “Whoever is running the business now wants to put their own stamp on it and grow,” says Batchelor.

While a few of the deals Withum works on involve family buy-outs, says McCallum, “It’s a growth story no matter how you slice it.”

The family members looking to buy out another family member usually want to do so because that family member is not on-board with acquiring more stores at the pace the remaining stakeholders would

like, he says.

Given the rise in the amount of capital needed to buy the most desirable stores, bringing in outside capital will only become more attractive, McCallum predicts. And it makes sense. Even for dealerships with a lot of cash flow, expansion can be difficult considering the rising cost of real estate.

Bringing in an equity investor can help make owning that desirable store a reality.

Some dealers settle for less because they believe it is their only option for growth. However, partnering with an equity investor increases their options. For example, a dealer looking to expand could either purchase a lower-performing store to sell inexpensive cars or partner with an equity investor to own a stake in a high-performing store selling luxury models. Equity investors offer dealers various choices, and we provide the necessary analysis to help them make the most profitable decision, says McCallum.

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Scout Motors’ Plan to Sell EVs Directly to Consumers Is Likely to Face Legal Challenges

By Attorneys Tom Vangel, Jamie Radke, and Lindsey McComber of Murtha Cullina LLP

On October 24, Scout Motors debuted its new Terra pickup and Traveler SUV, which are both EVs set to launch in 2027. With its announcement, the company reported that the revived brand will not rely on a traditional franchised dealer network to sell these vehicles but, instead, will implement a direct-to-consumer model which Scout believes will make the buying experience “transparent, super-fast, and super easy.”

Many Volkswagen dealers across the country are outraged and believe that this move violates state franchise laws. Automobile dealers’ associations across the country plan to challenge this model with the support of NADA CEO Mike Stanton, who has said that Volkswagen’s attempt to sell direct to consumers and compete with U.S. dealer partners is “disappointing and misguided,” and “will be challenged.”

Scout Motors was an American vehicle brand which sold trucks and SUVs from 1961 to 1980. In 2021, Volkswagen acquired the Scout trademark and name following the acquisition of Navistar International, which was a successor of Scout’s original owner. Scout Motors was revived in May 2022 to produce off-road capable EVs. Volkswagen has attempted to establish Scout Motors as an independent company managed separately from Volkswagen. However, automotive dealers across the country reject the claim that Scout is independent of Volkswagen and believe that this effort is “contradictory to all the efforts made to reinvigorate the [Volkswagen] brand with new models.”

With its announcement of its new EVs, Scout announced that it plans to begin producing up to 200,000 EV trucks and SUVs annually starting in 2027. It expects that the brand will have around three dozen retail centers across the U.S. by the time sales begin in 2027, and it plans to use batteries from Volkswagen’s joint venture battery cell manufacturer in Canada. Scout has also revealed that it plans to use an app to

handle reservations, sales, and delivery in order to reduce the cost of retail and simplify the EV buying process.

Similar to Tesla, Rivian, and Lucid, the newly revived Scout Motors is attempting to sell its EV models directly to consumers. Although Tesla has had some success in avoiding certain state franchise laws nationally because it was an independent startup not affiliated with an established manufacturer, Scout is likely to face more difficulty due to its relationship with Volkswagen.

Despite objections from Volkswagen dealers across the country, Scout CEO Scott Keogh has said that Scout is “a 100 percent separate brand, separate entity, separate structure, separate everything[.]” Also, when asked about the direct sales model, Keogh stated, “I think it’s critical moving into the future in unstable environments to control your customer, control your margin, control your operational experience[.]”

Scout Motors’ relationship with Volkswagen could give rise to a legal challenge from Volkswagen dealers in Massachusetts. Under Section 4(c)(10) of Chapter 93B of the Massachusetts General Laws, manufacturers are prevented from owning or operating “either directly or indirectly through any subsidiary, parent company or firm, a motor vehicle dealership located in the commonwealth of the same line make as any of the vehicles manufactured, assembled or distributed by the manufacturer or distributor.” Chapter 93B, Section 15 gives dealers who suffer from an unfair method of competition or deceptive act or practice at the hands of a manufacturer standing to bring an action for damages and equitable relief.

Several decades ago, the Massachusetts Supreme Judicial Court held that Chapter 93B, Section 15 does not confer standing on a motor vehicle dealer to maintain an action for violation of Section 4(c)(10) against a manufacturer with which the dealer is not affiliated. With this decision, the Court

ruled that the “purpose of Chapter 93B historically was to protect motor vehicle dealers from a host of unfair acts and practices historically directed at them by their own brand manufacturers and distributors.”

By eliminating standing for dealers who are not affiliated with the subject manufacturer, the SJC has essentially prevented any dealer from challenging the illegal operation of a company store by a manufacturer who has no franchised dealers. Although the Massachusetts Attorney General has standing to enforce Chapter 93B, 15 years ago the then AG refused to do so in the Tesla context despite repeated requests from the MSADA to the AG to enforce Section 4(c)(10). Presently we have a different Attorney General than 15 years ago. It is, therefore, unknown whether the AG will be of any assistance to Massachusetts dealers in the Scout Motors context.

However, it is questionable whether Scout Motors will be able to do the same as Tesla given its affiliation with Volkswagen, as Scout’s attempt to sell vehicles directly to consumers and bypass the existing Volkswagen dealership network arguably constitutes an “unfair method of competition” under Chapter 93B. The inevitable legal challenge will provide an interesting test case as to whether established auto manufacturers can avoid state franchise laws simply by establishing a separate legal entity and brand.

Volkswagen’s attempt to use Scout Motors to circumvent its established dealer network serves as an important reminder that dealers need to vigorously assert their rights as manufacturers attempt to marginalize their role in the sale and servicing of motor vehicles.

Tom Vangel and Jamie Radke are partners and Lindsey McComber is an associate with the law firm of Murtha Cullina LLP in Boston who specialize in automotive law. They can be reached at 617-457-4072.

Developments in Mass. Paid FMLA and Sick Time

By Jeff Fritz, Esq., and Joshua Nadreau, Esq., Fisher Phillips LLP

Employment law in Massachusetts, and nationally, is an ever-developing area. It is important for employers to keep abreast of changes in the law to ensure compliance and avoid sometimes extremely draconian penalties and/or legal exposure. This article focuses on some recent developments in Massachusetts Paid Family and Medical Leave law and Sick Time.

Mass. Paid Family and Medical Leave

Since 2021, Massachusetts has allowed employees to take paid time off work for qualifying family or medical reasons. The program is funded by both employer and employee contributions. While similar to the federal Family and Medical Leave Act, there are significant differences, including (1) PFML provides employees with up to 26 weeks of job-protected and paid family and medical leave each benefit year; (2) every Massachusetts business may be subject to PFML, even if not subject to FMLA; (3) employees may not be required to exhaust other forms of paid leave before utilizing PFML benefits; (4) PFML expands the definition of “family” to include parents-in-law, domestic partners, grandchildren, grandparents, and siblings; and (5) no employee tenure requirement exists for eligibility.

In 2024, the Department of Paid Family and Medical Leave increased the required contribution rate to 0.88% of eligible wages. For employers with twenty-five or more covered individuals, the family leave contribution is 0.18% of eligible wages (up to 100% of which may be withheld from the employee’s eligible wages), and the medical leave contribution is 0.70% of eligible wages (up to 40% of which may be withheld from the employee’s eligible wages, with the rest being the employer’s responsibility). For employers with fewer than twenty-five covered individuals, the total contribution is 0.46% of eligible wag-

es (0.18% for family leave and 0.28% for medical leave), all of which may be withheld from the employee’s eligible wages, with no contribution from the employer.

While initial forecasts anticipated yearover-year increases as high as 20% during the program’s early years, the DPFML recently confirmed the contribution rates will remain the same in 2025, a positive development for employers and perhaps a suggestion that the PFML program is stabilizing. That said the maximum weekly benefit rate (i.e., the amount of money an employee receives through the program) has increased, albeit modestly.

The Massachusetts Executive Office of Labor and Workforce has announced important updates to state employment benefits for 2025, including an increase in the State Average Weekly Wage, at which PFML benefits are pegged, from $1,796.72 to $1,829.13. This slight $32 increase breaks from previous trends where annual SAWW increases reached as high as 13%. Notably, this change impacts more broadly than PFML; it also impacts unemployment insurance and workers’ compensation programs.

While case law relating to PFML is only just starting to develop (as it takes time for issues to work their way through the courts), we note the Massachusetts Supreme Judicial Court recently clarified that, while the law affords employees job protection, including returning to the same or equivalent position, with the same pay, benefits, and seniority as when they began their leave (and maintenance of health insurance while on leave), it does mean they continue to earn or accrue benefits such as vacation or sick time while on leave.

Finally, keep in mind that, in the event an employee experiences an adverse employment action while on leave, or even within six months thereafter, the law presumes it was retaliatory, and the employer bears the burden of proving, by clear and

convincing evidence, it took such action for some other reason. You should consult legal counsel before taking such action to scrutinize it and try to reduce risk.

Massachusetts Earned Sick Time

Since July 1, 2015, Massachusetts requires almost all employers to provide earned sick time to all Massachusetts employees, including full-time, part-time, temporary, and seasonal. They must accrue at least one hour of sick time for every thirty hours worked, up to forty hours per year, which they may carry over to the subsequent year. They may use such time after their first ninety days and a maximum of forty hours per year. For employers of ten or fewer employees, the leave may be unpaid. For employers of eleven or more employees, it must be paid.

Since the law became effective, employees could use such time to care for a physical or mental illness, injury, or medical condition affecting the employee or the employee’s child, spouse, parent, or parent of spouse; attend routine medical appointments of the employee or the employee’s child, spouse, parent, or parent of a spouse; or address the effects of domestic violence on the employee or the employee’s dependent child.

Starting November 1, 2024, under a new law promoting access to midwifery care and out-of-hospital birth options, employees will also be able to use earned sick time to address their own physical and mental health needs, and those of their spouse, if the employee or spouse experiences a pregnancy loss or a failed assisted reproduction, adoption, or surrogacy. Keep this in mind the unfortunate event any of your employees experience such an event. t

Jeff Fritz and Joshua Nadreau are partners at Fisher Phillips LLP. They can be reached at (617) 722-0044.

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Planning for Dealership Succession

By Duncan Moseley

Managing Director, Business Transition Advisory Group, Truist Wealth

Middle-market business transitions are rarely simple, and family dealership transitions are among the most complex. Typically, a dealership begins after one family member opens a dealership and then decides to add more over time. Indeed, successful dealers say the best way to expand wealth in the industry is to increase the number of dealerships held. As the number of dealerships grows, so too does the number of family members involved in the business. An owner’s children may decide to work in the business; some might even make it their career, while others may choose to work in another field.

As their children become adults, dealership owners begin to wonder how they can plan for the succession of their business and the distribution of its assets amongst their children without risking the business itself or family relationships.

When owners have multiple dealerships and several children working in the business, they ask, “Should I put my children in business together, should I separate the dealerships and divide them amongst my children, or should I just sell the business altogether?” When owners decide to keep the business, they want to know how to provide for their children with other careers.

Take Marty, for instance. He started with one dealership and now has five, with a combined worth estimated at $150 million. Additionally, Marty owns the land where the dealerships are located, which is worth a combined $50 million. Outside of the business, Marty has about $10 million in assets, including a $3 million home and a $3 million beach property enjoyed by the entire family. But most of his wealth—like the airplane available to all family members—is tied up in the business.

Marty has three children. Alton and Betty grew up working at the dealerships and want to continue working in the family business. While they have quite different personalities,

neither can run the business alone. The third child, Carl, is happy with his own career outside of the business.

Marty’s total estate is $210 million, or $70 million per child. He has three goals: expanding the dealerships under the family name, giving each child a fair share of the wealth, and doing so in a way that maintains family harmony.

However, accomplishing these goals may become complicated. For example:

• If Marty divides his estate by three, there are not enough personal assets for Carl to receive an equivalent value to that of his siblings without including some business interest.

• If all three children receive a third of the business assets, the dealerships may suffer if they disagree on business goals. Moreover, Carl may resent salaries paid to his siblings, and they may resent him for taking a third of the profits when he does not contribute.

• If Alton and Betty cannot run the business together, there is not an even number of dealerships to divide between them, and the dealerships may lose value by not being part of a larger group.

• The airplane and beach home may present a source of conflict if certain family members lose access to an asset they have enjoyed for years.

And so, Marty is left with two crucial questions: “How do I treat each child fairly? And does the division have to be equal to be fair?”

Eight Key Points for a Succession Strategy

1. Interview your children to determine the intent and desires of each. Do they want to work in the business? Can they succeed together? Can they manage the business as a whole?

2. Educate your children about what it means to be in business together.

3. Explain how assets are not equal. Why might a fair share not be an equal share? Why is $20 million in cash not equivalent to a dealership valued at $20 million?

4. Set clear expectations on what your children must do to maximize the benefits

of your plan.

5. Involve your children in the business so you can mentor them, assess their capabilities, and examine their ability to work together.

6. Guide your children on managing their own personal financial lives and assess their ability to use the business’s assets responsibly.

7. Set a plan for children not involved in the business. If your children can work together but do not all want to work in the business, consider including the other children as non-voting owners, communicating clearly what they might receive based on your projected growth strategy.

8. Consider alternative ways to pass value to children who are not working in the business. You will need a different approach for a child who does not want to be involved with the business or whose involvement would disrupt the family dynamics or the business. Consider options like a life insurance policy, a dividend recapitalization to extract value, selling a business asset (including one or more of the dealerships), or prolonging a growth strategy for the business to keep that child’s inheritance on par with the other children. Discuss your approach with your child, showing your commitment to a fair, but not necessarily equal, distribution to a child who has chosen to pursue other opportunities outside the business.

What are the keys to creating a successful plan?

Time: Allow enough time to prepare the proper strategy. A succession plan is neither created nor accomplished overnight.

Education: Ensure you and your children have a thorough understanding of the options available within your business and outside of it so you can structure an appropriate plan.

Communication: Set clear expectations for your children, make sure they understand your approach, and get their buy-in at every step of the process.

Flexibility: Make your plan flexible enough to accommodate changes in your business operations, family dynamics, and personal goals of your children.

FTC Resource Limits and Safeguards Compliance

By Nick Reed IT Security Analyst, OCD Tech nreed@ocd-tech. com

The Federal Trade Commission is responsible for protecting consumers and ensuring fair competition across industries. In the automotive sector, the FTC’s Safeguards Rule, focused on securing customer information, has become a central spotlight. However, over a year has passed since the extended compliance deadline, with no significant updates aside from the breach notification amendment, and without enforcement action occurring. This lack of movement has left many in the automotive industry and in the broader non-banking financial institution sector questioning the urgency of adhering to these requirements, particularly after receiving additional deadline extensions.

So, why is this happening, and what could it mean for the auto retail industry?

FTC Priorities and Resource Limitations

According to the FTC’s 2022–2026 Strategic Plan, its primary objective is to protect the public from unfair or deceptive practices, while promoting fair competition remains its secondary goal. Notably, data privacy and security are not at the forefront of these priorities.

Despite its ambitious agenda, the FTC faces substantial resource constraints that hinder its ability to effectively enforce

consumer protection laws concentrated on cybersecurity. This could explain why the Safeguards Rule has taken a back seat; it is likely that the agency is unable to allocate resources toward cybersecurity regulations.

A Comparison with Other Independent Agencies

The FTC operates as an independent agency, much like the Federal Communications Commission and Environmental Protection Agency. However, its funding significantly lags behind other agencies.

• Small Business Administration: $40 billion

• Environmental Protection Agency: $9.16 billion

• Securities and Exchange Commission: $2.59 billion

• Nuclear Regulatory Commission: $1 billion

• Federal Trade Commission: $425.7 million

• Federal Communications Commission: $410 million

With just 1,100 employees managing over 70 laws as of 2021, the FTC is notably under-resourced. In contrast, the UK Information Commissioner’s Office has 768 employees, and Ireland’s Data Protection Commissioner employs about 150, despite their jurisdiction over much smaller populations.

A Limited Enforcement Record on the Auto Industry

Each year, the FTC presides over only a handful of cases in the automotive industry, none of which are under the FTC Safeguards Rule, with only a single case specifically addressing data security. This case involved an auto dealer software company that failed to implement

fundamental security measures to protect the personal information it collected from its auto dealer clients. The company’s lax approach to security resulted in unauthorized access to the personal information of 12.5 million consumers. This incident is often cited as a catalyst for the enhanced FTC Safeguards Rule. Other cases in the industry have primarily involved:

• Deceptive Practices: Including illegal “junk fees,” misrepresentation of addons, and misleading consumers about financing terms.

• Discrimination: Addressing racial disparities in auto financing, where minority customers often face higher fees or less favorable terms.

Despite these issues, recent FTC enforcement efforts have been focused on other higher risk sectors, such as healthcare, retail, and manufacturing, rather than the auto industry. This may be a reflection of the agency’s resource limitations and the need to prioritize more severe violations.

Why Cybersecurity Should Be a Dealership Priority

Despite the FTC’s resource constraints and delayed enforcement, the risks of cyberattacks are increasing. CDK’s 2023 State of Cybersecurity in the Dealership Study found that 17% of dealerships experienced a cyberattack in the past year, even though 53% of respondents expressed confidence in their existing protections. This overconfidence is alarming, especially considering it takes nearly 200 days on average for organizations to discover a breach.

With the increasing frequency of industry-wide attacks, such as the June continued on page 39

Zero Cost, Zero Reimbursement – Not So Fast

By Jordan Jankowski

COO, Armatus Dealer Uplift

Manufacturers supplying warranty parts at zero cost or on an “exchange” basis is a practice that has been around for a long time. However, this continues to be a misunderstood topic in terms of how the manufacturers actually compensate for these parts, versus how they are required to compensate the dealer under various state laws.

This practice, where manufacturers supply high-ticket parts to dealers at no cost, has become more common. While this approach might appear beneficial to some on the surface, it often results in financial challenges for dealers, who receive minimal handling allowances instead of a retail mark-up.

The following article explores the complexities surrounding zero cost parts, focusing on the legal landscape nationwide, where specific provisions exist to ensure dealers are compensated fairly. We delve into the process, the challenges dealers face, and the potential strategies you can employ to secure the retail mark-up dealers are entitled to by law.

Zero-Cost Part Provision Concept

Manufacturers sometimes supply warranty parts to dealers at zero cost or on an exchange basis. This can vary from manufacturer to manufacturer, but typically it includes high-ticket parts such as radios, navigation units, transmissions, engines, and EV batteries.

When it comes to these “exchange components,” manufacturers have historically only paid a handling allowance, which can range from approximately $25 to $450, depending on the part. However, there are currently 27 states which mandate both warranty parts reimbursement at retail rates and have a specific zero-cost parts provision. This statutory mandate

requires a manufacturer to compensate for ALL parts at a retail mark-up, and therefore only providing a handling allowance is in contravention of such a mandate. Of course, these states have enacted a specific provision because of the manufacturers’ reluctance to pay on these parts.

Nationwide, 49 states have legislation for retail compensation on warranty parts, and there is a logical argument that dealers are entitled to retail on zero cost parts, even if a specific provision is not in place. The concept is simple: If a warranty part is provided at no cost, the manufacturer is still required to compensate the dealer at their retail mark-up based on the cost of the part as listed in the manufacturer’s price schedule.

The realization of this reimbursement can be anything but simple, depending on the manufacturer and state. While certain parts may be supplied at no cost due to legitimate factors, there is a growing concern among dealers that many high-cost parts are being supplied at no cost solely to circumvent paying retail mark-up.

The Process

Unfortunately, the process is all over the board depending on the manufacturer and state. Some manufacturers have procedures in place that allow the dealer to easily submit their claim and receive retail reimbursement. Of course, some manufacturers may be willing to pay on most zero-cost parts but may balk with respect to EV batteries, which have been a huge point of contention nationwide. Many also seem to have nearly no formal process in place and will often make it difficult to obtain information on how to properly submit the warranty claim. Of course, this may

be by design in many cases.

A good starting point for a dealer would be to reach out to their regional representative in the process of determining how to submit for retail reimbursement on exchange parts. Most likely this will be some form of manual submission. A point of caution would be to ensure how the claim is characterized by the manufacturer, so that it does not impact your warranty expense report (EPVS/CPVS), which could affect your warranty expense calculation and could ultimately lead to an audit.

Reimbursement Example

Below is an example of a radio that a particular manufacturer supplies at no cost. The wholesale cost of this part is $995 but the handling allowance is a measly $25. In many states, you are entitled to your full retail mark-up on ALL parts. Meaning, a dealer with a mark-up of 80% would net $771 in additional gross profit on this part alone. When you consider all exchange components, a dealer could be looking at many thousands per year in

additional profit that could be put to good use, such as helping to pay and retain quality technicians.

The Bottom Line for Dealers

In the 27 states with a zero-cost provision, the law is clear that you are entitled

FTC Resource Limits and Safeguards Compliance

from page 37

CDK ransomware incident and several high-profile dealershipbreaches, along with constant updates to cybersecurity guidance, and a steady stream of warnings from experts, it is understandable why “cyber fatigue” is setting in. According to Cisco, this occurs when organizations become unenthusiastic and unresponsive toward defending against cyberattacks and affects as much as 42% of organizations. The automotive industry is no exception, and falling into this state could mean missing the obvious signs of a breach.

A cybersecurity lapse presents significant risks, not only because attackers can exploit vulnerabilities and organizations can face substantial fines, but also because hackers are aware of these penalties. Attackers may use this knowledge to their advantage, extorting victims by threatening to inform customers and report the breach to regulators unless they receive payment. This tactic effectively undermines customer trust and tarnishes the victim’s reputation while subjecting the dealership to increased scrutiny.

the FTC has not yet turned its full focus on the industry. The absence of immediate enforcement does not mean the threat is not escalating. In fact, both the frequency of cyberattacks and their associated costs are increasing each year.

Do not be lulled into a false sense of security just because the FTC has not yet turned its full focus on the industry. The absence of immediate enforcement does not mean the threat is not escalating.

Given the FTC’s constrained resources, it might be tempting to downplay the urgency of compliance with the Safeguards Rule. However, this should not lead to complacency. Cybersecurity risks continue to increase. The lack of enforcement today does not guarantee the FTC will not target the auto industry in the near future, and it certainly does not guarantee bad actors will not take aim at the industry. Since 2000, the agency has levied $15 billion in penalties demonstrating that, when it does act, the consequences are substantial.

By prioritizing the FTC Safeguards Rule now, dealerships can reduce their vulnerability to cyber threats and avoid regulatory penalties, positioning themselves ahead of potential enforcement actions and protecting themselves from malicious attacks.

Do not be lulled into a false sense of security just because

to retail reimbursement on exchange components. But while this particular provision in the law is designed to be self-effectuating, many manufacturers will interpret it otherwise, meaning you must “ask” for the reimbursement to receive it.

For some lucky dealers, their experience is that if they ask, their manufacturers may simply comply. In other cases, dealers have had to send in a letter on their letterhead or attorney letterhead; some that took this step have found success. Others have indicated that “it’s impossible”; in such cases where you have exhausted all your practical resources, you will need to make a business decision as to whether to pursue your rights legally.

While suing your manufacturer, or at

least threatening to do so, is neither desirable nor preferable, there may be no alternative with respect to a manufacturer who is not complying with the law.

But there is clear evidence that some dealers are receiving retail reimbursement on many or all exchange components, with the possible exception of EV batteries, without resorting to litigation or the threat thereof. Some dealers asked for reimbursement and are collecting significantly more gross profit without pushback or retribution from their manufacturers.

The process of securing fair reimbursement for zero-cost parts can be complex and varies widely depending on the manufacturer and state. By understanding your

statutory rights and taking the necessary steps to request retail reimbursement, dealers can potentially significantly enhance their profitability and ensure they are compensated fairly for the parts they provide during warranty repairs.

t

Jordan Jankowski is the Chief Operating Officer at Armatus Dealer Uplift. He has played a key role in consulting on 18 warranty reimbursement laws across the country and is widely considered a subject matter expert in this highly technical arena. Jordan manages a team of over 60 people, who produces thousands of retail warranty reimbursement submissions each year.

Motivating Your Staff — It Is Not One Size Fits All

By Jaime Decker

Ethos Group

Hiring self-motivated people is a priority, and it is something we all seek in potential employees. Managers often say, “I should not have to motivate them; they need to motivate themselves.” While self-motivation is important, as leaders, it is also our responsibility to understand what drives each team member. Getting people excited about daily opportunities is part of our job, but motivation is not a one-size-fits-all. It is a one-size fits ONE approach. Each person is motivated by different factors, and it is our job as leaders to discover what those are through a one-on-one conversation.

While everyone loves a good motivational speech, real success comes from understanding what inspires each individual, helping us boost morale and push our teams to not only meet but also exceed expectations.

Zig Zigler said it best: “People often say that motivation does not last. Well, neither does bathing – that is why we recommend it daily.”

As leaders, it is crucial to know what truly drives your team members. While everyone is different, here are seven common motivators that will likely resonate and help you connect with your people:

1. Purpose

Purpose-driven employees are motivated by a deep sense of meaning in their work. For these individuals, the two most important days in their lives are the day they are born and the day they discover why. They want to know that their ef-

forts make a difference. Identifying purpose-motivated employees is not difficult – look for these characteristics:

• They excel at what they do.

• They have a strong desire to achieve and succeed.

• Others recognize and acknowledge their talents.

• They consistently deliver results.

• They are always seeking ways to improve.

• They chase improvement daily.

When you find these employees, recognize how lucky you are to have them, as they are invaluable assets to your team.

2. Autonomy

Autonomy-motivated individuals thrive when they have the freedom to control their own work. These are the employees who take initiative and run with tasks. While they respect processes and procedures, they want the flexibility to inject their own personality and ideas into the project.

The biggest demotivator for these employees is micro-management; it frustrates and limits them. When you identify an autonomy-driven employee, give them the resources they need, then step back and let them take charge. You will be amazed by their appreciation and the results they deliver when given the freedom to simply get the job done.

3. Relationships

In our business, relationships are everything, whether it is with customers, coworkers, vendors, or dealer partners. For some employees, relationships are the primary reason they joined the team. They may have been drawn to your business because of an existing relationship, whether personal or professional. This connection is a strong motivational bond that drives them.

Relationship-motivated employees want to be a part of a team and value collaboration; they do not want to work in isolation. The beauty of relationships is

that they build trust, and trust is essential for guiding customers through our processes. When we have a relationship-driven employee, keep them connected with the people they trust. It will push them to achieve things they couldn’t or wouldn’t want to do alone.

4. Progress

Progress-motivated individuals are driven by the desire for personal and professional growth. When you identify these employees, encourage them to pursue activities that enhance both areas, whether it is attending seminars, reading books, spending time with mentors, or challenging themselves daily to improve. Progress is what fuels them, and, as they grow, it strengthens their connection to their leader and the dealership. These are the employees who are not easily swayed by external opportunities. They are looking for growth within the organization. If you do not provide opportunities for them to progress, they will seek it elsewhere.

5. Mastery

Mastery-motivated individuals are driven by the desire to become experts in their field. Whether they are master technicians, product experts, parts specialists, or process masters, these employees take pride in knowing everything there is to know about their profession. Once they master one area, they eagerly move on to the next challenge. The great thing about master-driven people is that they not only elevate themselves but also the dealership. They are willing to share their knowledge, making everyone around them better. When we partner with these individuals, we double our strengths as leaders, as they bring that extra expertise and drive that benefits the entire team.

6. Recognition

Recognition is a huge motivator for many employees, often more important than the compensation they receive. Some people are driven by the desire to please their leader, and, if their efforts go unno-

Cybersecurity – How Well Are You Managing Your Service Providers?

By Kaitlyn Paresi, ETHOS Group

The most common response dealers give in conversations about their network’s cybersecurity posture is that they do not house any information on their network; it is all ‘in the cloud’ or sent directly to a service provider’s database. This leads many dealers to (falsely) assume that their customer nonpublic information is automatically safe and secure within the service provider’s environment.

If recent history has taught us anything, it is that even the most widely used DMS and CRM service providers in the industry with the largest cybersecurity budgets are not safe from cyber criminals, not to mention small or regional website design, advertising, and marketing companies. It is for this exact reason that the FTC included a Vendor Evaluations clause in the most recent update of the Safeguards Rule, to ensure that dealers carefully consider with whom they are doing business and sharing the sensitive, nonpublic information of their customers.

A recent report by SecurityScorecard, mentioned in an article in Security Magazine, details that 29% of all breaches are attributed to third-party attacks. This means that almost one-third of breaches occur though the exploitation of trusted service providers and vendors.

To mitigate this risk, dealers need to have a documented, replicable vendor selection, vetting, and documentation process. Appropriate personnel must be trained on what that process is, how to follow that process, and how to manage and communicate

ticed, their motivation can take a hit. The key to recognizing these employees is to praise in public and improve in private. Public recognition should be thoughtful, with the right timing and attention to details. Starting small and building up can be the key to motivating them effectively. Sometimes, a simple “well done” is the best reward they can receive. Recognition stokes their motivation and encourages them to keep working hard for more kudos.

7. Money

Money can certainly be a powerful motivator. While it is not important to everyone, we all need it. For those motivated by financial rewards, money pro-

with the service providers and vendors that are carefully selected as business partners. Even though vendor management does not intuitively seem to be related to cybersecurity, it is important to understand the holistic landscape of what cybersecurity entails and how it should be approached, especially when most of your company’s data is housed by a third party.

Unfortunately, because it involves the most nuance and subjectivity, vendor management is traditionally the least understood and least emphasized piece of the Safeguards rule. Even though it is arguably the most critical piece of a dealership’s network environment, many dealers act as if vendor compliance can be “automated” or solved with a pre-signed agreement and risk assessment.

This could not be further from the truth.

While the risks vendors pose can never be 100% removed, performing the due diligence of vetting and verifying that vendors with whom dealers are sharing customer information are reputable, responsible, and take the necessary steps to safeguard information is more important now than ever before. Dealers need to make sure they can trust their compliance partner to be involved and knowledgeable about not only the regulations and compliance landscape, but also how their specific business functions within them.

For more information on how Ethos Group can help your dealership develop more leaders in your F&I office, sales management tower, and your sale’s floor in 2024, please contact Drew Spring at dspring@ethosgroup.com or 617-694-9761.

vides options and allows them to do good things for themselves and others. Using money as motivation is not a bad thing. Just remember, not everyone on your team is driven by it. For those who are, use it to your advantage. Set stretch goals and reward exceptional performance with financial incentives. These employees will go above and beyond to chase those rewards.

As Will Guidara wisely said, “Manage your money like a freaking maniac 95% of the time…so you can spend 5% of it foolishly.” These are exactly the people you want to spend that 5% on. They will not only appreciate it, but will push themselves even harder to achieve more,

knowing the reward is within reach.

Conclusion

Daily motivation is essential to your dealership’s success. We rely on our people to make the store productive and profitable. If you do not understand what motivates each employee, you are missing a significant opportunity to grow your business and improve profitability. One of the most rewarding aspects of leadership is fostering a strong culture, reducing turnover, and building a great team. By using these motivators consistently, you will create an environment where both your people and your dealership thrive.

OSHA Releases Top 10 Citations for FY 2024: What Now?

By Hao Nguyen, Esq. Senior Product and Regulatory Counsel, ComplyAuto

Like how children used to wait for the Toys R’ Us holiday catalog, health and safety compliance folks eagerly wait for the release of OSHA’s list of most frequently cited standards every year. The wait is over, as they unveiled these statistics during this year’s National Safety Council (NSC) Safety Congress & Expo.

These numbers are important because they provide valuable insight to companies and safety professionals to help them un-

#

1

2

3 Ladders (1926.1053)

4 Scaffolding (1926.451)

5 Powered Industrial Trucks (1910.178)

6 Lockout/Tagout (1910.147)

7 Respiratory Protection (1910.134)

8

9 Personal Protective and Lifesaving Equipment, Eye/Face (1926.102)

10 Machine Guarding (1910.212)

derstand not only OSHA’s priorities, but also what they should emphasize during the next year. We will show you the numbers and then generally discuss their application in the automotive industry. Note that these numbers are not specific to the automotive industry. However, they are no less important to help us forecast OSHA’s priorities moving forward.

The good news is that the overall number of violations in each category has gone down, but some categories have moved positions even though the top 10 categories remain the same.

Fall Protection, General Requirements

This section sets forth requirements for employers to provide fall protection systems…The employer shall determine if the walking/working surfaces on which its employees are to work have the strength and structural integrity to support employees safely. 29 CFR §§ 1910.501(a)(1)-(2)

All employers have a duty to provide fall protection systems at the worksite. If you are thinking this speaks to body harnesses (i.e., personal fall arrest systems) and the like, you would not be wrong. However, this also includes infrastructure that would prevent slips, trips, and falls or provide further protection for employees should these things occur. For example, if there is a “leading edge,” or a working or walking surface that is at least six feet above a lower level with an unprotected side or edge, employers are required to provide guardrails, safety nets, or personal fall arrest systems (as mentioned above). Additionally, the people below should be protected from falling objects by a toe board, screens, guardrail systems, and safety helmets.

Hazard Communication

The purpose of this section is to ensure that the hazards of all chemicals produced or imported are classified, and that information concerning the classified hazards is transmitted to employers and employees…The transmittal of information is to be accomplished by means of comprehensive hazard communication programs, which are to include container labeling and other forms of warning, safety data sheets and employee training. 29 CFR § 1910.1200(a)(1)

It seems like “Hazard Communication” always takes a spot in the top 10 list because it is so comprehensive. A proper hazard communication program includes a written policy; proper primary and secondary container labeling for hazardous chemicals; a comprehensive safety data sheet (SDS) manifest that evolves as chemicals are removed from service and new ones are introduced; easy employee access to these SDS manifests; and comprehensive employee training that includes chemical awareness and action in emergency situations. There are a lot of moving parts and you need to stay on top of each of them.

One additional note here is that OSHA amended the Hazard-

ous Communication Standard, published the final rule on May 20, 2024, and it has taken effect on July 19, 2024. Essentially, the SDS will be significantly updated, and all employers will need to update their SDS manifests accordingly. Knowing that this is a large undertaking, OSHA has created a tiered approach in the compliance date.

Ladders

The following requirements apply to all ladders as indicated, including job-made ladders. 29 CFR § 1910.1053(a)

Ladders can be used in multiple applications in the dealership, and the inherent nature of the various departments can lead to confusion and, thus, OSHA violations. Let me explain with an example. Ladders are predominantly used in a dealership’s service department and every person within the department is trained in their use. The staff also knows that the green ladder is the oldest of the bunch having seen decades of use and needs to be trashed, but no one does for sentimental reasons. Rather, they just put it in a corner and don’t use it. A new salesperson notices that the fluorescent light bulb went out in one of the offices and has taken it upon himself to grab a ladder from the service department to replace the bulb. Not knowing that the green ladder is out of service, he uses it because it is the only one there. The moment his leather oxford shoe’s sole hit the overly worn out seventh rung, he slipped, fell, and broke his arm when he tried to brace his fall.

Not only should every employee be trained on their proper use, but ladders should constantly be checked for any structural defects or maintenance issues and documented accordingly. Also, ladders should only be used as ladders and not to prop up other equipment, as a walkway between two platforms, or a shelving system.

Respiratory Protection

“…The employer shall provide the respirators which are applicable and suitable for the purpose intended. The employer shall be responsible for the establishment and maintenance of a respiratory protection program…” 29 CFR § 1910.137(a)(1)

A good respiratory protection program should identify when respiratory protection equipment is required and train employees in its proper use and maintenance. Additionally, employees should be properly fit for the respirators to ensure their efficacy and, if necessary, the employer must provide medical evaluations at no cost to the employee as respirators place significant physiological burdens on employees. Of course, document everything!

Lockout/Tagout

This standard covers the servicing and maintenance of machines and equipment in which the unexpected energization or start up of the machines or equipment, or release of stored energy could cause injury to employees. This standard establishes minimum performance requirements for the control of such hazardous energy. 29 CFR § 1910.147(a)(1)(i)

The concept of lockout/tagout seems straightforward enough: do not use “Machine X” until “Machine X” is properly fixed. However, it is not easy for many to remember once the stress of the day starts. If a piece of energized equipment needs to be fixed, cleaned, or otherwise worked on, the proper method is to shut down the equipment (if it is not off already) and lock it to prevent its use until the maintenance is completed. This would prevent the machine from accidentally energizing and causing injury (or even death) to anyone working on or close to the machine.

There is no shortage of lockout/tagout examples in the auto industry, so I will not repeat them. However, I want to impress upon

you the importance of lockout/tagout even in situations where energized equipment is not involved. Remember the example earlier about the “green ladder”? A service employee could have placed a lock on it to prevent its use until its proper disposal (or entry into the dealership’s museum).

Powered Industrial Trucks

This section contains safety requirements relating to fire protection, design, maintenance, and use of fork trucks, tractors, platform lift trucks, motorized hand trucks, and other specialized industrial trucks powered by electric motors or internal combustion engines. 29 CFR § 1910.178(a)(1)

As applied to the automotive industry, “powered industrial trucks” is the formal name for forklifts and motorized hand trucks. Make sure that every employee who uses the forklifts is properly trained on their operation. This means that they receive both online or classroom instruction and hands-on training where they can demonstrate their ability to use the powered equipment. Additionally, the forklifts must be properly inspected every day for safety (horn, reverse signals, seatbelts, etc.) and maintenance.

Fall Protection, Training

The employer shall provide a training program for each employee who might be exposed to fall hazards. The program shall enable each employee to recognize the hazards of falling and shall train each employee in the procedures to be followed in order to minimize these hazards. 29 CFR § 1926.503(a)(1)

You have to assume that fall protection is something that OSHA remains extremely vigilant about if it is to appear in the top 10 list as two separate entries! This point speaks specifically to training

employees. As noted earlier in the prior point about fall protection, the topic is far more involved than just arrest systems. Rather, it is a holistic, organizational approach that involves individual knowledge as well as building operations, such as toe guards and stanchions (to prevent folks from walking into fall hazards).

Scaffolding

Scaffolding can present plenty of issues in the dealership. They can be erected to service large vehicles, work on overhead systems (like ventilation or lighting), temporary paint booth access, parts storage maintenance, or building maintenance. Regardless of the application, it is important that you take all precautions in the construction but also daily operations of the temporary (or permanent) scaffolding. By this I mean to ensure that you’re using proper personal fall arrest systems where appropriate, guardrails, toe boards, and hazard recognition. Train your staff efficiently to ensure that they all have their hardhat-covered heads on a swivel either on or around scaffolding.

Personal Protective and Lifesaving Equipment, Eye/Face

The employer shall ensure that each affected employee uses appropriate eye or face protection when exposed to eye or face hazards from flying particles, molten metal, liquid chemicals, acids or caustic liquids, chemical gases or vapors, or potentially injurious light radiation. 29 CFR § 1926.102(a)(1)

I am sure we are all aware of the importance of eye and face personal protective equipment (PPE) in the service department. Whether your staff is grinding down metal or performing routine oil changes on a lifted vehicle, proper eyewear and face protection is imperative to protect them from flying particles and debris. Though the instruction is easy (“wear eye and face protection everyone”), in reality, its application may be a bit more difficult.

Many situations and excuses may arise where the PPE is not worn: the glasses fog up, the lenses are heavily scratched, the face shield is uncomfortable, or the eye protection does not fit over prescription glasses. Whatever the reason is, it is further exacerbated because the action that requires the PPE may be “only for a few seconds.” Meaning, your staff only needs to make a small cut, a quick grind, or a simple oil change.

Remove any and all of these excuses by ensuring that the PPE is properly stored when not in use, routinely refreshed with working condition PPE, and properly fitted to the users.

Machine Guarding

One or more methods of machine guarding shall be provided to protect the operator and other employees in the machine area from hazards such as those created by point of operation, ingoing nip points, rotating parts, flying chips and sparks. 29 CFR § 1910.212(a)(1)

All machines must have their proper guards in place to protect users and others from flying debris or accidentally catching their extremities. If you have not had this in place already, consider a policy whereby all staff who work on these specific machines do not wear jewelry that may either mistakenly catch on these machines or render the guards useless in protecting the user or those nearby.

Questions?

If you have any questions about anything that has been covered above – including training, policies, and inspections – do not hesitate to contact us! ComplyAuto offers unmatched tools to help you identify and remediate issues automatically.

Patrick Manzi NADA Senior Economist

October SAAR Highest in 6 Months

New light-vehicle sales in October 2024 started the fourth quarter off strong with a SAAR of 16 million units. October 2024’s SAAR was the highest in six months and was up 4.6% from October 2023. Through the first 10 months of the year, new light-vehicle sales totaled 13.02 million units, an increase of 1.6% compared with the same period in 2023.

New light-vehicle inventory on the ground and in transit increased in October 2024. Vehicle inventory totaled 2.94 million units at the end of the month, up 4.3% from September 2024 and up 36.2% from October 2023. We expect that inventory will increase in November before declining in December, as is typical at the end of the year. Looking ahead to 2025, we expect that vehicle inventory will hover around 3 million units during most of the year. As inventory has grown, so, too, has OEM incentive spending. J.D. Power estimates that average incentive spending per unit in October 2024 will total $3,149, an increase of 70.5% year over year.

Alternative-fueled vehicles continue to chip away at the market share held by ICE-powered vehicles. Through the first 10 months

of the year, alternative-fuel vehicles accounted for 19.5% of all new vehicles sold. Conventional hybrid vehicles have made up most of the broader alternative-fuel category and have seen the largest year-over-year sales gain. Year to date, conventional hybrid vehicles accounted for 9.8% of all new vehicles sold, and sales have increased 34.1% from the same period last year. Battery electric vehicles (BEV) have represented 7.8% of sales so far this year, and BEV sales volume increased by 7.9% year over year.

There will be two more Fed meetings before the end of the year, and we expect to see additional cuts to the Fed funds rate. We currently expect two 25 basis point rate cuts, which would result in 100 total basis points of rate cuts in 2024. We expect 100-plus basis points of rate cuts next year as well. We believe that these actions by the Fed will lead to lower auto loan finance rates next year, which should be a tailwind for new- and used- vehicle sales in 2025. Our outlook for total new light-vehicle sales in 2024 is 15.7 million units.

Post-Election, Dealers See Opportunity Ahead

By Cody Lusk President & CEO, American International Auto Dealers Association

Earlier this month, on Election Day, American voters made their preferences resoundingly clear. While many of us expected days, if not weeks, of vote counting post-November 5, the margins of victory ended up being wide enough for most races to be decided within hours of the polls closing.

Currently, in addition to winning the White House, Republicans gained four seats to flip control of the Senate from Democrat to Republican. While control of the House of Representatives has been determined to stay in the Republican’s hands, the exact number has yet to be determined. One of those flipped Senate seats was won by former car dealer Bernie Moreno, who defeated Democrat Sherrod Brown in Ohio. Brown, a stalwart UAW supporter who attacked Moreno’s past as a car dealer in his television ads, is currently the chairman of the Senate Banking Committee. His departure leaves open the possibility for big changes to financial regulations and expanded possibilities for crypto currencies.

President-elect Donald Trump will enjoy control of all three branches of government beginning in January, which should give his policy agenda a relatively easy launch in the first few months of 2025. What does that mean for AIADA’s members and our industry as a whole? At this point, it is reasonable to expect significant changes to America’s tariff structure and approach to global trade. Addition-

it is reasonable to expect significant changes to America’s tariff structure and approach to global trade

ally, regulatory agencies in Washington, D.C., will also receive a shakeup, and we could see substantial impact on the EV market, via changes to incentives and infrastructure funding.

As always, businesses large and small strive for certainty. While many of us see significant opportunities ahead under a Trump administration, we are also bracing for the inevitable upheaval that accompanies any new administration and Congress. At this point, I urge AIADA’s members to use the next few months to build a new relationship or strengthen an existing relationship with their Member of Congress. AIADA’s Dealer Visit Program is an excellent place to start. Any level of contact, however, can be a valuable starting point, as you work to expand your lawmaker’s understanding of the positive economic impact you have on their district.

While you work at home to grow your

business and influence your Representative, international nameplate dealers will have no shortage of advocates on Capitol Hill under this new administration. AIADA will be leading the way over the next four years as we remind our lawmakers and policy-shapers that your stores, products, and employees are powerful drivers behind the American economy. Armed with our Economic Impact Report, our team of government relations experts and veritable army of active and engaged dealers will make it clear that our corner of the automotive industry in America must be considered when weighing the impact of “America First” policies.

While the faces and parties in Washington, D.C., change frequently, AIADA will always be there, working for YOUR interests. I look forward to the next four years, and I see real opportunities for growth on the horizon.

By Scott Pearson Chairman, American Truck Dealers

Changes Afoot at ATD and Nationally

On October 23-24, the ATD Board of Directors met in South Carolina to review the status of various legislative and regulatory issues still in play in Washington. Our discussions included those items we have focused our lobbying efforts for our members throughout the Biden administration – fighting CARB and EPA truck emissions rules and EV mandates, the FTC’s Vehicle Shopping Rule, and the so-called right-to-repair bill, and pushing for repeal of the federal excise tax on heavy-duty truck purchases and passage of legislation combating catalytic converter theft.

We held robust conversations on tools to support our membership, through a revamped communications plan, strengthening our relations with our OEMs, and growing ATD Academy and 20 Groups, as well as outreach to our NextGen dealers at our dealerships. We also received an update on the upcoming 2025 Show in New Orleans in late January.

Finally, we elected Kevin Holmes to be our next ATD Vice Chairman, slated to move into the Chairmanship in 2026 upon the expiration of my two-year term. Congratulations, Kevin!

On November 5, the nation went to the polls and voted to bring back former President Donald Trump as our next president. The soon-to-be 47th president will have as governing partners a GOP House, with a slim majority, and a newly turned GOP Senate, where Republicans picked up four seats for a 53-47 majority. The incoming president has set forth an aggressive agenda to address issues of main concern to voters – the economy, inflation, taxes, border security, and international conflicts. At least for the first two years of his administration, President-elect Trump will be working with Congressional chambers led by his own party.

Alas, we bid farewell and good luck to ATD President Laura Perrotta. I have had the pleasure of working with Laura for several years, and she has delivered great strides of progress for our organization. Laura is not going far; she will be moving up the highway to Trenton, where she will become the new president of NJCAR – the New Jersey Coalition of Auto Retailers. We wish her the utmost success in

her new post. To fill Laura’s role, it is my pleasure to announce Jacqueline Gelb is joining ATD as its new President, effective December 9, 2024. Jacqueline comes to ATD from American Trucking Associations as their Vice President, Energy and Environmental Affairs. I look forward to working with her as we build upon our previous successes here.

Continue reading for more details on what’s happening at your ATD.

ATD Elects Mass. Dealer Kevin Holmes as 2025 Vice Chairman

By CAtheriNe york mANAger, CommuNiCAtioNs, NADA

The American Truck Dealers elected Kevin Holmes as its 2025 vice chairman. Holmes, president and CEO of Advantage Truck Group in Shrewsbury, Massachusetts, will succeed Scott Pearson as ATD Chairman in 2026 for a two-year term.

“It is my honor to be working lock step with our Chairman Scott Pearson as we navigate the ever-changing dealer business environment,” Holmes said.

Holmes currently serves as the ATD line representative for Freightliner. He also serves on the board of the Trucking Association of Massachusetts (TAM) and is a member of the Freightliner dealer council.

“I look forward to further strengthening our OEM relationships, continuing to grow our NextGen membership, and advocating and educating with our governing agencies,” Holmes said.

Holmes founded Advantage Truck Group in 1984 by investing his life’s savings. Advantage Truck Group is now New England’s biggest Daimler Trucks North America dealer, selling Freightliner, Western Star, and Isuzu trucks. The company has eight locations across Massachusetts, New Hampshire, and Vermont.

Holmes’ dedication to community service is reflected through Haulin’ 4 Hunger, a charitable initiative he started in 2012, together with his employees,

tru CK C orner

that helps provide thousands of meals each year to people facing hunger and food insecurity.

The election took place at ATD’s board meeting on October 23, 2024. Holmes’ term will begin at ATD Show 2025 in New Orleans in January.

New Dynamic Team Formed to Face Trucking Challenges

By mike stANtoN, PresiDeNt AND Ceo, NADA

Jacqueline W. Gelb is joining ATD as its new President, effective Monday, December 9, 2024. Jacqueline will replace previous president, Laura Perrotta, who was hired as the new president of NJCAR, which represents the New Jersey franchised auto and truck dealers.

Jacqueline has worked in the trucking and transportation industries for the past 13 years. Jacqueline comes to ATD from American Trucking Associations as their Vice President, Energy and Environmental Affairs, serving as the trucking industry’s subject matter expert on regulatory and policy issues impacting energy and environmental issues. Prior to ATA, Jacqueline was the Vice President Government Relations with Navistar Inc. There she led strategy and public policy priorities. Before working within the trucking industry, Jacqueline served numerous roles with Senator Jim Demint of South Carolina. Jacqueline is a graduate of Clemson University in Clemson, South Carolina.

Jacqueline takes the helm of ATD as the truck industry is facing challenging times. Jacqueline’s outstanding leadership and knowledge of the trucking industry is of critical importance and will provide a significant impact on the strategic direction of ATD. ATD is thrilled to have Jacqueline in this role with her passion for the industry, her valuable experience, and extensive connections.

David Bell, currently serving as NADA Director, Legislative Affairs, since 2020 will join ATD and have a major impact on the direction of ATD and its effective operations. David in his current role is heavily focused on ATD issues. David has a tremendous wealth of knowledge and familiarity with truck dealers, NextGen members, and manufacturers. As Director, ATD, David will continue his outstanding advocacy efforts to drive the influence on Capitol Hill while expanding his portfolio in industry relations, membership, and communications on behalf of the trucking industry.

Kim Carey remains with ATD as Manager, ATD, to facilitate the daily functions of ATD, while managing multiple projects. Kim has been with ATD since 2011 and continues to work very hard to advance ATD.

We look forward to this dynamic ATD team facing the challenges head-on for ATD members and the truck industry.

Issue Update: Mass., Oregon Delay CARB’s Omnibus Rule

In 2021, Massachusetts and Oregon adopted California’s Omnibus Low Nitrogen Oxide (NOx) Rule, which would drastical-

ly cut NOx emissions from conventional heavy-duty engines and lengthen the useful life of emissions warranty of mediumand heavy-duty diesel engines for use in vehicles with a gross vehicle weight rating greater than 10,000 pounds.

Massachusetts and Oregon were supposed to launch the rule in January 2025; however, each state will delay enforcement of its Heavy-Duty Low NOx Omnibus rule from 2025 to 2026. According to the Massachusetts Department of Environmental Protection Commissioner Bonnie Heiple, “There aren’t enough cleaner-burning engines available, to comply with the law, which requires that the new engines emit 75 percent less NOx and 50 percent less particulate matter compared with 2023.”

ATD also filed comment on October 22 supporting the California New Car Dealers Association’s comments and weighing in on CARB’s consideration of amendments to the Advanced Clean Trucks rule designed to improve flexibility within the ACT credit marketplace. Like CNCDA, ATD remains concerned about the broader impacts of the ACT rule and the Omnibus Low-NOx rule on the inventory and allocation of medium- and heavy-duty vehicles.

Massachusetts and Oregon are two of the ten Section 177 states to delay the enforcement of the NOx Omnibus rule. ATD is highly skeptical that ZEVs will be adopted at anywhere near the levels required to comply with the EPA and CARB rules. While dealers have supported the move to electrification with billions of dollars in investments and the purchase of ZEV inventory, the U.S. lacks an adequate national consumer and commercial vehicle charging network, which makes the rapid adoption of ZEVs required by both the EPA and CARB impractical.

Massachusetts and Oregon will both be moving forward with implementation of their Heavy-Duty Omnibus Low NOx rule in 2026. At the federal level, NADA/ATD will continue efforts to temporarily stop or disapprove of EPA’s de facto ZEV mandates.

Issue Update: NADA/TADA’s Legal Challenge to FTC’s Vehicle Shopping Rule

The oral argument for NADA/Texas Automobile Dealers Association’s legal challenge to the FTC’s Vehicle Shopping Rule took place before the U.S. Court of Appeals for the 5th Circuit on October 9, 2024.

Throughout the legal challenge, NADA and TADA have shown the court many reasons why the FTC’s Vehicle Shopping Rule violates federal law and should be set aside permanently, including the fact that the FTC:

• Unlawfully issued this rule without the advance notice required by its own regulations;

• Did not articulate a rational connection between its findings and its decision to impose a far-reaching rule; and

• Unreasonably evaluated the rule’s benefits and costs.

The Federal Trade Commission in a recent letter to House Financial Services and General Government Appropriations

Subcommittee Chairman David Joyce (R-Ohio) and Rep. Ashley Hinson (R-Iowa) stated that truck “dealers….would be covered by the Rule.” Chair Khan also stated that “the Rule does not impose substantial costs, if any”, ignoring the fact (1) the Rule imposes over $1 billion in regulatory costs on light-duty dealers; and (2) the FTC never bothered to do any analysis on the cost of this rule on heavy-duty truck dealers. Accordingly, the FTC has no idea what costs this rule imposes on heavy-duty truck dealers and their customers. In fact, nowhere in the FTC’s rule does it even mention the words “heavy-duty.”

The FTC’s response also avoided addressing the question of whether the VSR applies to business-to-business transactions.

ATD will ensure that Congress is made aware of these problematic gaps in their rule, the real cost of implementation to dealers, and the tremendous overreach that is unfolding with commercial truck dealers being covered by a consumer-focused rule that never mentioned commercial truck dealerships.

Truck Dealer and Industry Outreach

• ATD Speaks at Karmak’s Conference and Expo: ATD Kenworth Line Representative Jodie Teuton and ATD’s President Laura Perrotta discussed the regulatory environment for truck dealers facing the CARB and EPA truck rules and how they are playing out in the marketplace.

• ATD Joins a Panel as Part of Virginia Trucking Association’s Annual Convention: David Bell, NADA Director of Legislative Affairs, joined a panel on October 7 to discuss heavy-duty truck emissions standards. The panel was an opportunity to discuss state and federal heavy-duty truck regulations and the impacts of these stringent mandates on the trucking industry.

• ATD Speaks on a Panel for the New Jersey Business and Industry Association: ATD President Laura Perrotta spoke on a panel with NADA Director Rick DeSilva on October 15. The panel focused on Decarbonizing the Transportation Industry.

Join Us in New Orleans for the ATD Show – 10 Reasons to Register Today for ATD Show 2025

Register today for the ATD Show in New Orleans at the Hilton Riverside Hotel, January 23-25. You cannot miss this opportunity to learn, network, and experience New Orleans. Plus, you get two shows for the price of one – when you register for the ATD Show, you also get access to everything at the NADA Show. Here’s a compelling list of reasons to register today:

1. These rates won’t last! Don’t delay – hotel rooms are going fast!

2. Four General Sessions. Learn how robust data management practices and artificial intelligence (AI) systems can steer your truck dealership toward a more profitable and resilient future in “The Power of Your Data and AI.” Gain practical strategies to build trust, foster collaboration, and lead with courage in “Building a Winning Team.” You cannot miss OEM leaders

discuss market trends, truck regulations, emerging technologies, electric trucks, and “Navigating the Path Forward.” And, in “Fueling the Future,” explore the latest clean truck technologies and fuels that will power trucks going forward.

3. Workshops and Exchange Sessions. Whether you prefer traditional lectures or more interactive learning, ATD Show 2025 has you covered. Gain insights into the latest strategies and emerging trends from world-class speakers.

4. NEW! Super Session: “Decoding CARB”. CARB’s new truck regulations are shaking up the California market. Hear from the experts on how these changes impact sales, inventory, and the truck market. Gain valuable insights and strategies to help you thrive in this evolving environment.

5. ATD NextGen Leadership Networking Breakfast and Seminar (optional ticketed event). This optional event offers a unique chance to network with like-minded truck dealers and managers, and enjoy an insightful discourse on Next-Level NextGen, featuring keynote Drew Thompson. Hear lessons learned from an experienced fleet director with an exceptional track record of creating and leading high-performance teams in demanding and high-risk global environments. Then, break into groups to discuss proven leadership practices to achieve success in the transportation, logistics, and supply chain industries. All levels of experience are welcome to add this optional ticketed event to your itinerary.

6. Make Meetings. Meet directly with OEMs to learn the latest updates and changes happening within your franchise.

7. Connection Hub. Enjoy this casual yet engaging space where you can connect with colleagues, explore new business opportunities, and deepen relationships with industry leaders. Plus, do not miss the ATD Welcome Reception on Thursday night, happening right here in the Hub! ALSO NEW: Gear up for Truck Talk! Enjoy insightful mini-presentations on what’s driving the truck industry.

8. Non-Stop Networking. ATD Show 2025 offers a series of receptions, including the ATD Welcome Reception, Networking Reception, and ATD NextGen Reception. These gatherings create a relaxed atmosphere for you to socialize and share ideas.

9. Truck Dealer of the Year. This national award recognizes commercial-truck dealers for business performance, industry leadership, and service to their community. Join us for the announcement of the winner.

10. Access to NADA Show 2025. Your ATD Show registration gives you access to the NADA Show 2025, where you can catch captivating Main Stage speakers Ryan Leak, Frank Caliendo, and Coach K. Plus, explore the Expo, attend Super Sessions, and enjoy the immersive entertainment at NADA Fest, the welcome reception at the Sugar Mill.

What are you waiting for? Register today at https://www. nada.org/atd-show/atd-attendee-registration.

Election Results Will Lead to Definite Federal Policy Changes

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This month’s federal elections saw a revitalized Republican Party retake the White House, as former President Donald Trump (#45) became President-elect Donald Trump (#47); hold on to its slim majority in the House; and, with a gain of four seats, grab the Senate majority 53-47, with Vice President-elect J.D. Vance available to serve as a tie-breaking vote in any deadlocked roll calls.

Where the current Biden administration showed itself to be a complete opposite of Trump 45’s policies, the incoming Trump 47 administration most definitely will swing back 180 degrees to do everything not Biden, including less of a heavy hand on the regulation scale when it comes to the business community.

Although we await an unveiling of the specific policies Trump 47 looks to put forth, the President-elect was quite clear on the campaign trail – more domestic energy production, fight inflation, lower taxes, less regulations, a focus on “America first” initiatives. Pretty much what we saw in Trump 45.

As always, we at NADA will provide you with all the information you will need to strive to be successful under the new administration.

Finally, we continue to get ready for Show 2025 in late January, in New Orleans. Hotels are going fast, so register ASAP. And, while there, we will install our new chairman and vice chairman – Tom Castriota from Florida and Rob Cochran from Pennsylvania.

NADA

Chairman Gary Gilchrist Letter to Directors and ATAEs Fellow Dealers and ATAEs,

Year after year, you literally change lives and help make your own communities vibrant. Of course, I do not need to remind you of the important role you play in your commu-

nities, from leading local chambers of commerce to making big, impactful charitable contributions. And, of course, you always step up when there is a crisis.

The truth is, you are part of an even bigger family; America’s entire franchised dealer network.

And today, many of those family members – some very far away from you – are hurting and could really use your continued help.

Hurricanes Helene and Milton have devastated dozens and dozens of communities across the southeast. The stories I have heard and reports I have seen break my heart. We still don’t yet know the full extent of the damage, and we do not know the full number of dealership family members that have been directly impacted. But we know that there are many.

The NADA Foundation Emergency Relief Fund has been activated to provide immediate relief to the communities in the hurricanes’ wake. Funded by dealers, NADA, and industry partners, the Emergency Relief Fund provides financial assistance to dealership employees affected by natural disasters like the hurricanes we have witnessed in the past few weeks.

We need more donations. And we need them from across the country. Emergency Relief Funds are going exactly where they should, but we need to keep the fund healthy. And not just to support dealer employees who need our help today, but to be prepared to act quickly when the next disaster strikes.

I’ve seen and heard many stories from dealerships and dealer associations doing their part to help people they’ve never met.

Employees of Dick Myers Chrysler Dodge Jeep Ram in Harrisonburg, Virginia, collected a community’s worth of donations and supplies and drove a box truck, cargo van, and two trailers over the border to Roan Mountain, Tennessee, a small community in the Blue Ridge Mountains flooded by the hurricane.

Representatives from Williams Chevrolet Honda Kia drove vehicles full of donated toiletries, cleaning supplies, baby formula, and diapers all the way from Traverse City, Michigan, down to the communities affected by Helene.

Jim Ellis Toyota, located in McDonough, Georgia, blasted an invitation to hurricane evacuees across its social media channel. The dealership, located off I-75 between Atlanta and the Florida state line, offered shelter, coffee, and water for those fleeing Hurricane Milton.

Nothing about this reaction surprises me. Franchised dealerships will always step up to support each other, our employees, and our neighbors.

But our family is everywhere. No matter where you are, please consider making a donation to the NADA Foundation Emergency Relief Fund if you haven’t already. You can make a big difference. And I know you will.

Many thanks,

Gary Gilchrist 2024 NADA Chairman

Donate to the Emergency Relief Fund – Checks are gladly accepted. Please send checks made payable to: NADA Foundation

8484 Westpark Dr, Ste. 500 Tysons, VA 22102

Please note in the memo field:“Emergency Relief Fund”

NADA, State Associations Will Challenge Scout DTC Decision

In late October, Volkswagen announced that it will be retailing its Scout line of EVs through an online direct-to-consumer process, thereby bypassing its current family of franchised dealers in the United States. On October 25, the National Automobile Dealers Association released the following statement by its President and CEO Mike Stanton:

“VW AG’s decision to attempt to sell Scout vehicles direct to consumers and compete with its U.S. dealer partners is disappointing and misguided, and it will be challenged. Unfortunately, it’s also not terribly surprising, as VW AG CEO Oliver Blume and Scout CEO Scott Keogh have avoided engaging with or even responding to NADA for months.

“Since VW AG signaled the reemergence of the Scout brand in the U.S., NADA has communicated very clearly on numerous occasions to their leadership that the franchise system is the best and most-efficient way to deliver the customer experience that today’s marketplace demands. This was recently reinforced by an independent study of the cost and value of new-car distribution by the consulting firm, Oliver Wyman, which concluded that utilizing franchise dealers is more cost-effective than a direct sales channel and provides tremendous value to automakers and consumers alike.

“NADA and state dealer associations fully stand behind VW and Audi dealers that are being left behind by this decision and are prepared and will challenge this and all attempts to sell direct in courthouses and statehouses across the country.”

NADA Board Elects Florida Dealer Tom Castriota as 2025 Chairman, Pennsylvania Dealer Rob Cochran as Vice Chair

NADA announced, on October 22, that it has elected Tom Castriota as its 2025 chairman. Castriota, owner of Castriota Chevrolet, Inc., in Hudson, Florida, will succeed Gary Gilchrist, president of Gilchrist Chevrolet Buick GMC, Inc., in Tacoma, Washington.

“I am humbled and grateful to become the next NADA

Chairman,” said Castriota, who currently serves as NADA vice chairman. “I want every dealer and dealership employee to know that NADA will continue to be the strong voice of the dealer that you need. NADA, along with our state and metro associations, is here to protect and promote our franchise system. NADA will continue, through our Dealer Attitude Survey, to bring the dealers’ concerns to their respective OEMs. And finally, NADA will continue to be the dealers’ influential voice before Congress, the administration and federal regulators, and the courts.”

Castriota, 70, began his dealership career working in his family’s store in Pittsburgh, Pennsylvania, after retiring from the U.S. Marine Corps. He and his wife Anita Castriota later purchased their own store, Castriota Chevrolet, Inc. Castriota has been on the NADA Board of Directors representing Florida since 2016.

Rob Cochran, 58, who represents Western Pennsylvania’s franchised new-car dealers and currently serves as the NADA Industry Relations Committee Chairman, was elected as NADA vice chairman for 2025. Cochran is the president and CEO of #1 Cochran, Western Pennsylvania’s largest automotive retailer. He has been on the NADA board of directors since 2020.

“I am incredibly honored to be elected NADA 2025 Vice Chairman,” said Cochran. “So much of what we do as dealers is about families. Our own families, our families of employees, and the families within our communities. And of course, our big family of franchised dealers all across the country. The privilege of working on behalf of our families is powerfully motivating to me, and I will do everything I can to advance the needs and priorities of franchised dealers everywhere.”

Robert Vail, president of Vail Buick GMC in Bedford Hills, N.Y., was re-elected as secretary. Kirt Frye, president of Sunnyside Automotive Group in Middleburg Heights, Ohio, was re-elected as treasurer.

The election took place at NADA’s board meeting on October 22, 2024. The new terms begin at NADA Show 2025 in New Orleans in January.

Register for “Women Driving Auto Retail” Event in New Orleans at Show 2025

The annual NADA Women Driving Auto Retail event at NADA Show explores gender diversity in the auto retail industry. This popular event features structured and informal networking, and inspiring speakers.

Timing: Thursday, January 23, 2025, at 8:30am-11:30am

• 8:30am-9:15am: Breakfast

• 9:15am-10am: Late-Night Lessons in Leadership

• 10am-10:45am: Organized Networking Segment

• 10:45am-11:30am: Breaking Barriers, Building Success

Price: $150 for dealers and managers, $200 for exhibitors. This event sells out quickly.

Please note this is an optional ticketed event and is NOT INCLUDED with your NADA Show 2025 registration.