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Dealers: You must take audits very seriously. From reports around the country, franchisors have been increasing their audit activity. Of special concern are vehicle exports – vehicles that you have sold that wind up in another country. Some states have taken steps to give you rights in connection with export audits. They have required that in any export case, a franchisor must show that the...

There has been significant publicity recently about Ford Motor Company’s ultimatum to Lincoln dealers. According to reports, if they want to remain Lincoln dealers, they must invest an average of $1 million to upgrade facilities. Not to handle the cars that Lincoln now builds, mind you. But in the hope that Ford can introduce vehicles that compete with world-class luxury cars now on the market...

For the last two decades, dealer doc fees and processing fees have been hot button issues for plaintiff lawyers seeking to sue dealers. As recently as a month ago, the Supreme Court of Arkansas issued a decision that a dealer who is paid doc fees for filling in forms is engaged in the unauthorized practice of law. Most states are not in expansive as the definition of the practice of law as...

Every smart business owner wants to maximize profits and minimize taxes. Tax planning to minimize taxes is simply a sound business practice. However, small business owners should beware of “too good to be true” sales pitches from the local insurance agent or CPA because certain tax-savings options can actually generate more – and more expensive — tax issues. A business owner wants legitimate...

When was the last time you checked your open account with your manufacturer? When was the last time you checked other accounts, such as a co-op advertising account? The franchisor open accounts should be reconciled monthly. It should be a regular part of the controller’s month end duties. Why? Very simply, there is a great deal of money credited to and debited from those accounts. Are you...

You generally want to know the qualifications of the professionals with whom you deal. You generally like to know that your doctor went to medical school and that your lawyer went to law school. Why then, when you go into your bank and you are solicited to purchase financial products, do you assume that you are dealing with a qualified professional? Banks are important components of our...

Dealers generally assume that a customer who leases a vehicle will have the right to buy it at the end for the residual value. That is not always the case. Pricing for a lease is generally based on three pieces: the residual which is the unamortized portion of the lease at which the lessor will own the vehicle if the buyer simply allows it to terminate, the upfront payment which is the amount...

In a recent story, Automotive News reported on an informal online survey of F&I managers in which 29% responded that salespeople or sales managers fill in credit applications for customers at their stores. They’re just trying to help the customers fill them out the right way. What could go wrong? Plenty. What happens if a customer claims that the income or time on the job shown on the...

It does not matter whether you are filling out a financial services application or an insurance application for your first or tenth time. Pay attention. Applications matter. That is especially the case when the representative you are dealing with says that they aren’t really that important or that the representative will fill out the application for you. Here’s why. We all know about the...

Many dealers assume that if they simply pull a vehicle history report and it shows no damage, that they are safe in assuming that the vehicle has no serious prior damage. This is simply not the case, however. Even the operators of vehicle history report providers give disclaimers that the vehicle history reports they sell may not contain all important information concerning a vehicle’s...