Through good times and bad, the National Automobile Dealers Association, now in its 109th year, has worked tirelessly for our franchised car and truck dealers. Those efforts were on display once again this month as NADA was able to put on a fantastic Show in New Orleans that was initially threatened by a snowstorm that overwhelmed the city’s and region’s resources. The fact that NADA leadership persevered in the face of such adversity on behalf of dealers and exhibitors is a true testament to its board of directors and staff. Congratulations to our NADA director, Scott Dube, for a successful Show. More importantly, we had the chance to honor our Massachusetts TIME Dealer of the Year (TDOY), George Haddad of The Haddad Auto Group in Pittsfield. At the Dealer of the Year event, George was named one of the five finalists for the national award, which is quite an honor. This was the fourth year out of the past five that we have had a finalist – quite a statement for the quality of our TDOYs. Ultimately, this year’s award went to Raymond Farabaugh of D-Patrick Inc. in Indiana.
George Haddad
Honored as National Finalist
We had a great turnout at our annual party co-hosted with our accounting partner, Withum, to honor George as our dealer of the year. We were also fortunate to have previous TDOY nominees attend – Joe Shaker (2022) and Ernie Boch, Jr. (2007).
Beyond George’s business success, his engagement and history of giving back to his community in the Berkshires is inspiring. We could not have asked for a finer individual to stand on the New Orleans stage for us this year. Congratulations, George!
Finally, MSADA and dealer associations across the country are preparing for the challenges ahead from our OEMs and government alike. Just because there was a change in the White House and a full GOP Congress does not mean we will have an easy go of it. We still need to fight for rational pro-dealer policies that will bring robust economic growth to our businesses, employees, communities, and states. And VW and Honda seem committed to pursuing the introduction of new product lines outside the realm of their already existing – and quite successful – franchised dealer network.
Later this year we will be traveling to our nation’s capital for the annual NADA Washington Conference. By then, however, decisions could have already been made affecting various legislative proposals. Lobbying never takes a rest. We will depend on dealer input throughout the year when needed to bring our stories to our Members of Congress and the Trump administration in the coming months. If you want to get involved in engaging with our Congressional delegation on our industry’s issues, always feel free to contact me or our Executive Vice President, Robert O’Koniewski. Many hands can make light work.
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
Ally
Maryanne Recupero (617) 997-9574
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
Stephen Delaney (781) 981-9370
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
Nick Chappell (508) 930-2199
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
eDealer Services, LLC
Tom McKinnon (617) 631-3293
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
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
Jane Cogliano (781) 844-8951
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
NADA Show 2025 Beats Back Major Storm En Route to Success
TDOY Haddad Named National Finalist
By Robert O’Koniewski, Esq.
MSADA Executive Vice President
rokoniewski@msada.org
Follow us on X (formerly Twitter) • @MassAutoDealers
Over the years it seems the Big Easy’s voodoo spirits have it in for NADA.
In 2017, ice storms book-ended NADA’s 100th anniversary celebration. In 2021, Covid restrictions prevented a live show, forcing all events to be held virtually. And then came this year’s snow.
As convention attendees were preparing to hit New Orleans for NADA Show 2025, which was set to begin on Thursday, January 23, a rare blizzard, fueled by arctic cold and a moisture-laden low-pressure system from the Gulf of Mexico (America?), hammered the Crescent City with a foot of snow and ice, breaking a 135-year record. With no snowplows or de-icing equipment to clear roads and bridges or airport runways, the storm basically shut down the city.
With the airport prophylactically closed down at midnight on Tuesday, one had to be in by Monday if you were going to be there on time at all. I must admit, coming from our own storm prior to getting down to NOLA, it was a bit surreal watching a former NHL player skating on the streets or others breaking out skis to traverse otherwise blocked streets or snowboarding down the levee. “Ski New England”, for a couple of days, became “Ski New Orleans”.
In the face of such adversity, NADA leadership and staff immediately put into place alternative plans to ensure that the Show would go on.
Congratulations and kudos go out to NADA president Mike Stanton and his folks for not skipping a beat from the opening night party on Thurs-
day through to the incoming chairman’s reception on Sunday, and all the main stage and live interview events and educational sessions in between.
By the time the Show was set to commence, over 15,000 franchised dealers and key staff, state and metro dealer association leadership, vendors, media, and other affiliated members of our industry gathered on January 23-26 in New Orleans to celebrate the successes of and discuss the challenges to franchised dealers here and across the world.
During the four-day celebration of free market capitalism, dealers heard from a cast of first-rate speakers on the main stage: on day two, executive coach and bestselling author Ryan Leak; on day three, comedian, actor, and impressionist Frank Caliendo; and on Sunday’s concluding day, basketball coach Mike Krzyzewski, who led Duke to five national titles and the U.S. men’s hoop team to three Olympic gold medals.
Attendees also heard from outgoing NADA chair Gary Gilchrist of Gilchrist Chevrolet Buick GMC in Tacoma, Washington, and incoming 2025 chair Tom Castriota of Castriota Chevrolet in Hudson, Florida.
The opening night party was held at the Frank Morial Convention Center as an alternative venue to what was planned for an outdoor celebration but for the historic blizzard.
Attendees had access to over 500 vendors on the convention center’s exhibition floor. Moreover, a major pillar of the convention is education. Reg-
istrants had access to over 60 education workshops throughout the four days.
Concurrent with the NADA Show, American Truck Dealers (ATD), led by chairman Scott Pearson of Peterbilt of Atlanta, held their convention at the Hilton Riverside Hotel.
For me, each year the TIME/Ally award ceremony is one of the highlights of NADA’s annual convention since it spotlights the considerable positives dealers deliver to their communities every day in addition to providing hundreds of thousands of jobs across the country. The ceremony is preceded by a brunch at which this year’s 49 nominees, their families, and their nominating ATAEs enjoy the friendship and fellowship the meal is meant to engender and celebrate. This year we heard from college and pro football icon and local legend Archie Manning and his son, Cooper, a hotel owner and developer who is brother to those other Mannings, Peyton and Eli.
On Saturday’s Main Stage, TIME and Ally conducted the Dealer of the Year ceremony. As we detailed in our December Auto Dealer, Massachusetts was well represented by George Haddad of The Haddad Auto Group in Pittsfield. Ultimately, George was one of the five finalists named. Alas, Indiana dealer Ray Farabaugh received the national title.
George became our seventh finalist –and fourth in the last five years – in this event, preceded by Fred Cain (1970), Julian Lucini (1978), Donald Rodman (2004), Christine Alicandro (2021), Gary Rome (2023), who was honored with the national title, and Tom Murphy (2024).
A man of considerable character and accomplishments in his hometown and the Berkshires, we could not have had a better representative for us on the Main Stage this year. That evening, your MSADA held its annual cocktail party, co-hosted with our accounting partner, Withum, to honor George and to bring together dealers and affiliated industry folks in a few hours of relaxed camaraderie. Our congratulations and best wishes go out to George and his wife, Shari.
Finally, prior to the NADA convention,
the Automotive Trade Association Executives (ATAE) held its winter meeting. ATAE, housed in NADA’s Virginia headquarters, works with NADA on its national dealer organization programming and matters of federal advocacy on dealer issues, including participation in the annual Washington Conference and the ATD Congressional Fly-In. The ATAE network consists of the CEOs of over 100 state and metro new car and truck dealer associations in the United States and Canada, including this writer. I also am finishing another twoyear term on the ATAE board.
This year’s ATAE winter meeting included presentations and discussions on a number of legislative and regulatory issues, such as the continued transition to EVs in the marketplace, various assaults on the dealer franchise system, especially from VW and Honda, and efforts to enact bills in Congress to rein in the FTC and its vehicle shopping rule as well as the EPA’s overly aggressive EV mandates.
Be sure to mark your calendar for the 2026 NADA Show, February 3-6 in Las Vegas.
Check out our cover story on pages 1620 and Scott Dube’s NADA column on pages 52-56 for all the details on the New Orleans Show.
Fed Court Strikes Down FTC’s Vehicle Shopping Rule
In yet another positive court action for franchised auto dealers against a Biden administration rule, on January 27, the U.S. Circuit Court of Appeals for the Fifth Circuit, in a 2-1 vote, granted a petition filed by the National Automobile Dealers Association and the Texas Automobile Dealers Association to vacate the Federal Trade Commission’s Vehicle Shopping Rule –also known as the Combating Auto Retail Scams (“CARS”) Rule – for violating the FTC’s own procedural requirements for issuing trade regulation rules.
More specifically, the court held that the FTC skipped an essential step to inform the rulemaking process requiring it to begin with an Advanced Notice of Proposed Rulemaking. As a consequence, the FTC
Vehicle Shopping Rule has no force or effect.
In a bit of irony, the Fifth Circuit Court of Appeals is in New Orleans, Louisiana, and its ruling was delivered a day after the dealer association wrapped up its annual NADA Show in the same city.
NADA President Mike Stanton called the decision a “victory for the rule of law and a great outcome for consumers.” He added the rule “would have added massive amounts of time, complexity, paperwork and cost to the car-buying and car-shopping experience for virtually every customer.”
NADA, in a statement issued after the decision, reminded dealers that many provisions that were in the Vehicle Shopping Rule have been subject to FTC enforcement under Section 5, and dealers should continue to ensure compliance with all existing rules related to advertising, sales and financing.
We extend our congratulations and appreciation to NADA and TADA for their extensive efforts in defending our franchised auto dealers against such government overreach.
Gov’s FY26 Budget Includes E-Title, E-Sig Provisions
On January 22, Governor Maura Healey filed a $62 billion spending plan for FY2026. Her budget (House 1) proposes about 6.8 percent more spending than the FY25 budget she signed last August.
Included in her budget plan are provisions that would authorize and direct the Registry of Motor Vehicles to establish procedures for the creation and issuance of electronic titles and for the acceptance of electronic signatures on all sales and lease transactional documents.
These are matters your MSADA have long advocated for before this and previous governors, the RMV, and the Legislature. Readers may recall that we successfully fought for these provisions’ inclusion in last year’s House FY25 budget, only to see them remain unresolved and not taken up as the House and Senate conference committee created a final budget plan.
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Nevertheless, we, along with other interested parties, continued to advocate for these provisions throughout the informal sessions in the remaining months of the 2025 legislative session.
Now that the governor has filed her House 1 budget, the House Ways and Means Committee will hold a series of public hearings around the state over the coming weeks to take input from citizens and affected parties within the $62 billion spending plan. The committee would most likely release its version of the FY26 budget some time in early April for consideration by the full House.
Subsequent to House action, the Senate will take action in May, setting up consideration by a House-Senate conference committee and final legislative approval before the July 1 start of the fiscal year, a deadline which has not been meant in over a decade.
Gov. Unveils 2025 Transpo Spending, Funding Plan; No New Taxes, Tolls, Fees Proposed Sales Tax Trade-In Allowance Untouched, For Now
On January 14, Governor Maura Healey publicly released her administration’s $8 billion transportation spending plan, using the millionaires’ income surtax revenues, existing funding sources, and borrowing to firm up the MBTA’s financial situation and jump start other needed transportation projects.
While releasing the final report of her Transportation Funding Task Force, two weeks after its December 31 due date, the Governor unveiled a multi-pronged proposal that would be implemented through three different pieces of legislation, combining new spending and bond authorizations into a package that could total $8 billion over the next decade.
According to The State House News Service, the governor pitched the plan as a way to put the state’s transportation system finances on a steady course in the short term while setting the stage for major transformations further down the line. Her proposal relies almost entirely on us-
ing a larger share of the 4% income surtax on high earners and eschews other revenue-generating taxes and fees at a time when Beacon Hill has been trying to focus on ways to address growing affordability concerns.
Gov. Healey appointed the task force eleven months ago with the stated goal of developing recommendations for a “longterm, sustainable transportation finance plan.” The group concluded that the best approach presently was to use existing revenue options, such as the income surtax, to stabilize the MBTA’s finances, support regional transit agencies, and address a growing list of road and bridge needs.
The task force analyzed several ideas for new sources of transportation dollars but concluded those should receive additional scrutiny and consideration at some unspecified point in the future.
Gov. Healey’s overall proposal includes $1.8 billion in new spending for transportation operations and $6.2 billion for capital programs over a decade-long span. Most of the direct spending would impact the T, as its impending budget gap would otherwise require service cuts and set back improvements achieved over the past year. State support for the T would total more than $2 billion next year. Her plan directs half a billion dollars in surtax funds to the MBTA while maintaining the nearly $190 million the state annually provides the T in its budget; the T also would still receive its annual portion of state sales tax revenue, estimated to total about $1.4 billion next year.
The Governor’s plan does not include grabbing $136 million annually with the elimination of the vehicle sales tax tradein allowance.
The elimination of this tax allowance for consumers is near and dear to anti-car advocates. Readers may recall that, several years ago, transportation advocacy groups had touted revenue sources such as eliminating the vehicle trade-in allowance, increased highway and bridge tolling, increased gas taxes, and imposing road congestion pricing in order to pump additional revenues into the state’s highway fund. The proposed elimination of the trade-in
allowance provoked a strong response in opposition from your Association. Although these types of potential revenue sources are mentioned in the report, for now there is no appetite in the Legislature or the Governor’s office, who all would stand for re-election in 2026, to impose new, considerable expenses on motorists, consumers, and taxpayers.
One fight the Governor seemed to commence with the issuance of the report is that with education advocates such as the teachers unions. Since the passage of the millionaires’ tax in 2020, which statutorily mandates the surtax revenues go to transportation and education programs, a large majority of the surtax revenues has been earmarked for education funding. The Governor and certain legislative leaders now want to re-jigger those spending commitments to equalize the dollars between the two earmarks. The Governor’s announcement seeks to send about twothirds of the surtax monies to transportation in the coming year, something that runs counter to the teachers unions’ priorities, especially their demand for increased pay hikes.
Ultimately, this all will play out in the Legislature over the coming months, as it deliberates the Governor’s legislative proposals, which she highlighted in her State of the State speech on January 16.
The task force’s full report is available at https://www.massdotat15.com/transportation-funding-task-force.
State, U.S. Govt. Reach Agreement on UI Debt
What You Need to Know about the Unemployment Insurance Agreement
By Sam Larson Associated Industries of Massachusetts
The Healey Administration and the US Department of Labor (USDOL) jointly announced a settlement on Monday (January 20) under which the Massachusetts unemployment insurance (UI) system will be required to pay back the federal government $2.1 billion over the next 10 years.
State officials discovered in 2023 that the Baker administration improperly used
$2.5 billion in federal pandemic relief funds during the COVID-19 pandemic to cover jobless benefits that should have been paid by the state.
Total liability with fees and interest to the federal government surpassed $3 billion. The deal saves the state UI system, which is paid for exclusively by employers, roughly $900 million. The Healey Administration announced that principal payments of the debt will come from the UI trust fund annually but the interest payments to the federal government will come from the state’s general fund.
The January 20 settlement closes the issue of the state’s federal debt but is likely to accelerate the existing structural problems of the UI system, which is projected to be insolvent by 2028. At the same time, the settlement creates an opportunity for sustainable and meaningful reforms to a system long plagued by instability and mismanagement.
Unemployment in Massachusetts reached unprecedented levels in 2020 due in part to state-mandated business closures during the pandemic. The federal government during the Trump and Biden administrations passed a series of stimulus bills to cover the cost of many new unemployment insurance claims while the state covered the cost of layoffs from traditional industries.
During this time the Massachusetts Department of Unemployment Assistance (DUA) mistakenly used federal pandemic unemployment money to pay for claims that should have come from the state system. A 2023 audit discovered the error dating back to 2020 and the Healey administration has been in negotiations with USDOL ever since. It appears that Massachusetts was the only state to make this error.
The agreement will have no immediate impact on your business and 2025 UI taxes will not be impacted. First quarter UI notices have already been sent to companies and the taxes due for this year will not change. Most companies pay the majority of their annual UI taxes in the first quarter because UI is only assessed on the first
$15,000 earned.
This settlement will also not impact or increase the COVID assessment employers are currently paying to address other debt incurred during the COVID pandemic.
The settlement will, however, strain the system as a whole and will accelerate trustfund insolvency. The first payment to the federal government is due December 1, 2025, and will not impact 2026’s UI rate which is set in September of 2025. Annual withdrawals of $200 million from the system will eventually result in higher rates and a less stable system.
The state UI trust fund is unbalanced and already in a dire financial situation. The state system is projected to be insolvent by the first quarter of 2028 based on estimates that did not account for the federal debt. This error and the settlement will accelerate insolvency.
Massachusetts unemployment benefits are the most generous in the country and the system pays out more than it takes in. In 2024 employer payments to the system were $1.13 billion but the benefits paid out were $2.10 billion. This is an unsustainable imbalance during relatively low unemployment. The system ended the year with a balance of $2.16 billion on a cash basis. That balance will quickly erode even with tax increases imposed on all businesses as the system moves from schedule C to schedule D.
Employers are currently paying down roughly $2.7 billion in COVID related debt to the system through the COVID assessment. This assessment covers bonds issued to pay off debt the system incurred when the trust fund went bankrupt due to the volume of claims during the COVID-19 pandemic. Employers are in the fourth year of a six-year timeline to pay off the COVID assessment. The new settlement does not impact the COVID assessment.
Fixing the UI system is a priority for the business community. Governor Healey has already indicated that the time for reform is now. The business community will work with the Governor and the Legislature to build a functional system.
The business community supports common-sense reforms that will eliminate outliers on the benefit side in order to stabilize the system and reduce employer costs. Proposed reforms include use of the rainyday fund to support the system and pay off federal debt; reduce the maximum week amount from 30 to 26; freeze maximum benefits; lower maximum benefits; and reign in minimum eligibility requirements.
In yet another instance of a federal court shooting down a Biden administration regulation, on January 24, the U.S. Court of Appeals for the Eleventh Circuit Court (covering the southeastern United States) overturned the Federal Communications Commission’s Rule regarding one-to-oneconsent (otherwise known as “closing the lead generator loophole”) that was set to go into effect on Monday, January 27. The opinion vacates the rule in its entirety and nationwide.
The rule would have required dealers to obtain individual consent for every consumer contacted. The court ruled that the rule exceeded the FCC’s statutory authority because the new consent requirements “impermissibly conflict” with the Telephone Consumer Protection Act’s (TCPA) meaning of “prior express consent.”
Quoting from the opinion in Insurance Marketing Coalition Limited v. Federal Communications Commission, the court concluded, “In its attempt to ‘implement’ the TCPA, the FCC overstepped statutory boundaries. Agencies have only those powers given to them by Congress, and enabling legislation is generally not an open book to which the agency [may] add pages and change the plot line. But changing the plot line is exactly what the FCC tried to do here. Congress drew a line in the text of the statute between ‘prior express consent’ and something more burdensome. Rather than respecting the line that Congress drew, the FCC stepped right over it.”
The rule would have required dealers to ensure that any contact information used to text or call customers received from third
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parties (including leads from OEM management systems) meet the new requirements. The FCC made clear that liability for the rule is on the caller or texter and cannot rely on the lead generator to retain proof of consent.
When the rule was finalized in late 2023, NADA issued a Compliance Alert and memo to assist dealers with compliance. NADA also included the rule in the recently updated Dealer Guide to Federal Email and Telemarketing Restrictions. Dealers should consult this guide for all other issues regarding compliance with the Telephone Consumer Protection Act and other regulations related to calling and texting.
IRS Issues Changes to EV Tax Credits Program
Dealers with EVs in their current inventories should be aware of recent developments that could have an impact on the availability of federal tax-based EV lease and sales incentives in 2025.
The changes in incentive availability could show up in a number of ways:
On the positive side, on January 15, the Internal Revenue Service renewed for 2025 a safe harbor that lessors rely on in offering lease promotions based on EV tax incentives. This should permit lessors to continue offering those promotions.
However, on the negative side, some tax-based EV incentives may become less available this year.
• First, “30D” tax incentives for consumer purchases are only available if the vehicle contains a certain percentage of components and battery materials from domestic sources, and those percentages go up each year on January 1. As a result, the number of vehicles offered by NADA members that qualify for these tax incentives went down on January 1, 2025, and currently stands at eleven.
• In addition, since 30D incentive qualification is measured on the day the dealer sells the vehicle to the consumer (rather than on the day the vehicle is sold to the dealer by the OEM), some vehicles that qualified for the tax credits in 2024 do
not qualify as of January 1.
• President Trump and the Republican Congress have indicated that they would like to undo the EV tax incentives. This is especially true for the tax credit that auto lessors have been using to support EV lease promotions. As a result, dealers could see a reduction or elimination of clean vehicle tax credits, including the lease programs that have been supporting upwards of 80% of EV deliveries vanish at some point.
Dealers carrying EVs in their current inventories may consider taking advantage of the EV tax credits, and the lease programs based on them, before the potential foregoing changes occur. Please watch for future guidance from NADA on this issue.
IRS Issues Rule Affecting Dealer F&I Programs
On January 14, the Internal Revenue Service published a final rule related to the listing of captive finance company (micro-captive) transactions and micro-captive transactions of interest.
The final rule incorporated several important recommendations NADA made in its comments, which Crowe LLP prepared on NADA’s behalf, including:
• Clarifying that when the ultimate beneficiaries are unrelated customers, GAP and other products do not cause a dealer to be considered “insured” under the law;
• Improving the Consumer Coverage exception applicable to dealer F&I programs by removing a proposed “Commissions” requirement that would have been burdensome and confusing for dealers; and
• Clarifying that diminished value contracts could qualify as “consumer contracts” for purposes of the exception.
Expert dealer tax attorney Andrew Weill of Weill & Mazer, APC, and Past President, National Association of Dealer Counsel, summarized the success as follows:
The IRS released its final version of regulations that previously had burdensome requirements for many popular dealership F&I programs. When the regulations were first proposed, NADA submitted a detailed
comment letter to the IRS, outlining the problems posed by the proposed regulations, and urging the IRS to modify them to make a clear carve-out of dealer F&I programs from the regulations. Many other industry comments expressed their support for NADA’s recommendations.
NADA’s efforts were successful. In the announcement of the final regulations, the IRS stated that it had been persuaded by the comments spearheaded by NADA and was clarifying the regulations to make it clear that typical dealership F&I arrangements would not be subject to the new regulations. Essentially, the IRS gave dealers everything NADA had asked for.
Most dealers using F&I programs will no longer have to file burdensome, intrusive, and unnecessary disclosure statements that had previously been necessary on business and personal tax returns.
Compliance Reminder –Doc Prep Fees
As you prepare for 2025, now is a great time to review your documentary preparation fee, the so-called “doc fee”. A doc fee can be charged by dealers to offset the costs incurred by a dealer in processing various paperwork associated with a sale; it is not to be used as a “profit-making” component of the vehicle purchase.
• There is no set maximum in Massachusetts law that a dealer can charge, but dealers should practice restraint. We have assisted dealers previously with a calculation template.
• The doc fee must be included in the total purchase price advertised to customers.
• The doc fee is not optional; charge everyone the same amount or charge no one.
• Two items that may never be included in the “doc prep” fee: (1) preparation of the Retail Installment Sales Contract cannot be part of the fee’s calculation as you would then need to wrap it into the APR calculation; and (2) if you are on the EVR system, you cannot include the EVR fee in the “doc prep” fee.
• Do not charge anyone more than $5 for a title prep fee; it is set in state law.
• We have a template for a customer bro-
chure available for dealers to provide to customers explaining the doc fee. Several times we have beaten back previous legislative efforts to regulate the doc fee. Please do not let fee abuses cause additional scrutiny from legislators and regulators. Check out MSADA Bulletin #5, issued on January 10, 2025, for more information on this matter.
Your dealership’s employee handbook and pay plans should be adaptable documents as new federal and state law and regulatory changes impact your operations continually. Use the beginning of the year to work with your counsel to make any necessary changes to your operations and HR policies to remain compliant with the letter of the law. Fighting employee lawsuits are becoming more commonplace and expensive and can easily overwhelm the simple cost of a legal review of your documents by competent counsel.
Compliance Reminder –Print Ad Regs
The beginning of the new year is an excellent time to review your print advertisement practices to make sure you do not run afoul of state and federal enforcement activities by the Massachusetts Attorney General or the Federal Trade Commission. This is true especially if you leave it to ad copy writers who do not necessarily remain vigilant to current regulations. If necessary, dealers should consult with competent counsel to ensure their ads comply with both state and federal rules. Check out our MSADA Bulletin #2, issued on January 7, 2025, discussing these important rules you need to follow.
2025 Dues Invoices
At the start of January your Association sent out 2025 dues invoices to all our dealership and associate members. Our members’ dues help fund the Association’s activities on their behalf, including our lobbying on Beacon Hill and in Washing-
ton, our member counsel services, and our education and training activities.
Over the last several years we have witnessed quite a bit of economic disruption in our industry, including governmental over-regulation. More than ever, our dealers need a strong MSADA. MSADA will continue to lead on the various issues that threaten the viability of our dealerships. We will strive continuously to keep you informed of developments in our industry and how they will play out in Massachusetts. These efforts also include working closely with NADA to better serve our members.
Our strength lies in our members. With your continued support and membership renewal, we can build on our current foundation and begin to enhance your Association’s core purposes of communication, advocacy, and education.
NADA Dealership Workforce Study Now Open
NADA knows that dealers today face numerous challenges, including high employee turnover, difficulties in recruitment, and the constant pressure to remain competitive in a rapidly evolving market. These demands deplete valuable resources and significantly impact overall dealership performance and profitability. Understanding workforce trends and leveraging data-driven insights are crucial steps in effectively addressing these issues.
The NADA Dealership Workforce Study is a resource to assist dealers in addressing these challenges and understanding dealership issues with real data from NADA members. It is the only authoritative and comprehensive examination of auto dealership workforce trends. This study provides the latest industry data on employee compensation, benefits, turnover, retention, demographics, hiring trends, hours of operation, and more. The data is published in annual reports for members only. The reporting shows national and regional data as well as sales volume ranges from low and high-volume stores.
Participation is key to the success of the study and the value of the data. NADA member dealers can enroll at https://www.
nadaworkforcestudy.com/Main.aspx. There is no cost to participate. What do you get for participating in the study?
• National & Regional Trends Report: Overview of compensation, benefits, turnover, retention, hiring, and demographics trends.
• New! Refreshed NADA Online Database Search Tool: Your data at your fingertips. View your submitted data and conduct comparison analysis using custom filters online and on demand. Exclusive oneyear access for study participants only.
Once you enroll you will receive an email with instructions to complete an online benefits questionnaire and complete the payroll file. All responses and data are confidential.
IMPORTANT!! You will need the NADA Member ID number for your single store or Dealer Group to enroll. If you do not have this NADA Member ID number, please contact NADA Customer Service at (800) 557-6232.
The enrollment for the 2025 Study closes promptly on March 14, 2025.
Presidents’ Day (Feb. 17) – No Special Work Rules Apply
This year, the Presidents’ Day holiday occurs on Monday, February 17. Under Massachusetts law, employees may be required to work the day, and, since January 1, 2023, employers do not need to worry about holiday premium pay requirements. For a discussion of all the 2025 holidays, please see MSADA Bulletin #164, issued on 12/30/24.
NOTE: In addition to complying with the Massachusetts holiday laws, a dealership must also comply with its own policies. If your Employee Handbook or past practice says that a certain holiday is a “paid holiday,” then you are required to pay employees for those days even if they are not regularly scheduled workdays. As a result, dealers are urged to review their holiday pay policies carefully to ensure that they accurately reflect their actual practices.
AUTO OUTLOOK
NADA Show 2025 Succeeds in Face of Storm
Mass. TDOY Haddad Named Finalist
THIS YEAR ’ S NADA SHOW certainly was one for the books.
An historic snow and ice storm, the magnitude of which was last seen in New Orleans 135 years ago, ended up closing down the city for a couple of days and threatened NADA’s ability to even put on Show 2025. The storm followed the January 20 inauguration of President Donald Trump, for a second time in a non-consecutive term, the last time seen in the U.S. 130 years ago with Grover Cleveland.
Regardless of the storm’s impact, NADA leadership and staff committed to making the necessary schedule and venue adjustments. Exhibitors worked for three days straight to set up their booths in a compressed timeframe. Dealers and other attendees found various ways to arrive in the Big Easy – via planes, trains, and automobiles – through cities that were not New Orleans’ Louis Armstrong airport to make the Show work.
The storm’s impact albeit may have been temporary, the forthcoming policies of Trump 2.0 will be longer lasting and certainly dominated a large chunk of the conversation at the Show.
NADA Show 2025, held January 23-26, brought together over
15,000 attendees from across the globe – U.S. and international dealers and their key staff, state and metro dealer association leadership, vendors, media, and other key members of our industry.
Over the course of four days, attendees had access to 500plus exhibitors, more than 60 workshops and education sessions, dealer franchise meetings, and an impressive list of keynote speakers.
Although this year’s Women Driving Auto Retail event was cancelled due to the storm’s disruptions, NADA leadership kicked off the annual convention on Thursday evening with its Welcome Reception that had to be moved inside the convention center from its previously scheduled outside venue. Part jazz fest, part bayou bash, NADA Fest offered plenty of opportunities for networking with
fellow dealers, OEMs, exhibitors, and industry affiliates. Grammy Award winning jazz artist Trombone Shorty headlined the event, and plenty of only-in-NOLA flavors were on hand.
On Friday, Day Two of the Show, NADA leadership conducted the ceremonial unbuckling of the seatbelt at the Ernest Morial Convention Center.
NADA 2024 Chairman Gary Gilchrist’s remarks ahead of the seatbelt unbuckling emphasized the unofficial theme of this year’s Show—”resiliency.” Franchise auto dealers “have a prov-
en track record of adaptability and resilience,” Gilchrist said as he recapped his tenure as NADA chairman. “Thank you for the opportunity of a lifetime and an unforgettable year.”
Executive coach and bestselling author Ryan Leak also spoke about resiliency during his inspiring Main Stage session, highlighting how to “level up as a leader” and build flexible, high-performing teams at the dealership. So many “of us have been through a lot just to be in this room, not just this week but in life,” Leak said.
The convention seeks to build to a crescendo during Day Three’s events on Saturday. Nothing beats the buzz in the convention center than the annual TIME Dealer of the Year ceremony jointly sponsored by Ally. For 14 years, TIME has partnered with Ally to honor America’s best and brightest car dealers for their tireless efforts to improve their communities and the world around them.
Massachusetts was once again well represented among the 49 nominees by George Haddad of The Haddad Auto Group in Pittsfield. And when George was named one of the five finalists, there was a murmur amongst Team Massachusetts that maybe our nominee would be crowned Dealer of the Year once again. Alas, Ray Farabaugh from Evansville, Indiana, a fine nominee in his own right, was named the national 2025 TIME Dealer of the Year. Congratulations go out to George for this recognition.
18 NADA SHOW 2025
Also on Saturday, Tom Castriota of Florida was introduced as NADA’s new chairman for 2025.
That evening, MSADA co-hosted with our accounting partner Withum our annual party honoring our TIME Dealer of the Year – George Haddad. Despite some storm-caused no-shows, we had a great crowd of around 150 folks, including two previous TDOY nominees – Joel Shaker (2022) and Ernie Boch, Jr. (2007). A great time was had by all.
Finally, Day Four of the convention on Sunday is a time for attendees to wind down and get ready to return home with newly learned insights and tools to improve dealership operations. The morning’s inspirational session featured Mike Krzyzewski –Coach K – a man who really needs no introduction for those who follow basketball at all levels.
The former head of men’s basketball at Duke University, where he led his players to five national titles, as well as coaching three Olympic gold-medal teams, Coach K is a master motivator of not only teams, but also individuals and organizations.
On Sunday, Coach K took to Main Stage to share key coaching tips and inspire dealers to spur employees on to succeed beyond even their own expectations.
“Your people are the single biggest resource,” Coach K said. As for putting together a team, Coach K stressed how dealers need to ensure staff set aside their egos and buy into the larger vision. Even if they are LeBron James and Kobe Bryant, he joked. Employees “have to feel what they’re doing,” Coach K said. “If they only come to work for you…it’s not going to be optimal. They have to feel it in their heart.”
With the completion of Day Four, it was time to cede the limelight to an event nothing can top although many try – the circus of Super Bowl LIX was coming to town in two weeks at the New Orleans Superdome.
NADA Show 2026 returns to Las Vegas, February 3-6 (Thursday-Sunday). It is never too early to circle the dates on your calendar and plan accordingly. If you have not been, there is plenty offered up that can help your dealership in all areas of operation. The learning, networking, and camaraderie cannot be beat.
Outgoing NADA Chairman Gary Gilchrist Calls On Dealer Body to Fight for the Franchise Model, Customers
By Jared Allen, NADA
On the Show’s day two, in his final address to the country’s franchised new-car dealers as the 2024 NADA Chairman, Gary Gilchrist called on dealers across the country to join NADA in “playing more offense” against the kind of regulatory overreach and OEM intrusion that has plagued the industry recently and that is so harmful to customers and dealers alike.
“Dealers have never played a more central role in delivering the best possible customer experience than they do today,” Gilchrist, a third-generation dealer, said at the 2025 NADA Show in New Orleans. “And as of just a few days ago, the federal government
“Dealers have never played a more central role in delivering the best possible customer experience than they do today,”
is getting out of the business of telling you how to sell cars, and what kinds of cars you have to sell. And I have only one thing to say in response to that: It’s about time.”
Gilchrist channeled the optimism felt throughout the dealer body about a return to a more realistic and achievable regulatory environment under the Trump administration and the 119th Congress, and explained that with the change in leadership in Washington, D.C., NADA and dealer advocates everywhere “can finally stop playing constant defense, and can start playing more offense.”
“We’re going to push for sensible, workable and achievable emissions regulations that finally, finally put the customer at the head of the table,” Gilchrist said. “And you bet we’re going to keep pushing to stop the Federal Trade Commission’s disastrous Vehicle Shopping Rule from taking effect.”
Gilchrist addressed not just advocacy in the federal govern-
ment, but within the industry, as well. In the last several months, two manufacturers have announced they will attempt a direct sales model. Gilchrist addressed the issue head-on.
“Let me say it plainly, so it is clear to everyone: Any decision by any automaker to try to compete with or cut out its dealer partners is misguided,” he said. “Any direct-sales model would do nothing less than undermine any automaker’s relationship with its franchised dealers, and every single one of those dealers has already made significant investments in their current brands and future products.”
Gilchrist reminded his fellow dealers of the priorities he set at the beginning of his term: to increase NADA engagement with dealer members and to strengthen NADA’s relationship with the state and metro dealer associations across the country.
“Our industry’s need, our customers’ need and our country’s need for a strong franchise system, to sell and service new vehicles, and to deliver the customer experience that today’s marketplace demands, has never been more apparent than it is right now, today,” he said.
Dealership satisfaction scores hit an all-time high at the end of 2024, according to Cox Automotive. Gilchrist credits dealerships’ commitments to transparency and fairness, and their dedication to meet each customer’s needs.
“In all of my years of involvement with NADA, and with my own state association in Washington, I have never seen a dealer body so engaged, and so willing to roll up their sleeves and become such strong dealer advocates,” he said. “And for the first time in almost a decade, you are in charge of your own destiny.”
Gilchrist, president of Gilchrist Chevrolet Buick GMC, Inc. in Tacoma, Washington, previously led the Washington State Auto Dealers Association and the Washington State Auto Dealer Insurance Trust. He has represented Washington on the NADA Board of Directors since 2017.
“Large companies can write a check, but none can do it like the thousands of local dealers who live in, work for, and care about their communities”
–Tom CasTrioTa
Incoming NADA Chairman Tom Castriota Draws on Experience as U.S. Marine to Lead Franchised Dealers
By Jared Allen, NADA
On day three of the NADA Show, Tom Castriota addressed the country’s franchised new-car dealers for the first time as the NADA chairman at the NADA Show 2025, setting the tone for a year of advocacy and emphasizing the community impact of dealerships.
“Yes, you are individuals who compete against each other –and that’s a good thing,” Castriota said to a room of thousands of dealers, managers, and automotive retail industry leaders in New Orleans. “But you are also part of something bigger – the U.S. auto retail industry and franchised dealer network.”
Castriota’s term commences at a significant time for franchised auto dealers, with the transition of presidential administrations, threats to the franchise system from manufacturers, and the rocky consumer shift to electric and hybrid vehicles. In his keynote address, Castriota shared his experiences as an officer in the U.S. Marine Corps and how it has informed his perspective on his business, leadership and the industry.
“My decades in the military taught me the simplest definition of service: being unselfish,” he said. “From my days as a company commander, to working in special operations out of Central Command in Iraq, the Marine Corps taught me that when you take care of the troops, they take care of you. While I no longer have troops, I do have employees and a community to serve. And like all of you, at my family’s dealership, we prioritize taking care of them.”
Castriota shared that franchised new-car dealerships support charitable organizations with a one-half billion dollars each year, amounting to five billion dollars over a decade.
“Large companies can write a check, but none can do it like
20 NADA SHOW 2025
the thousands of local dealers who live in, work for, and care about their communities,” Castriota said. “That’s another reason the franchise system is so important. And more proof that a strong franchise system is key to a strong America.”
Castriota, owner of Castriota Chevrolet, Inc. in Hudson, Florida, will succeed Gary Gilchrist as NADA chairman. Castriota has been on the NADA Board of Directors representing Florida since 2016.
NADA Seeking to Work with Trump Administration on EV, FTC Rules
Former Dealer and New U.S. Senator Moreno Addresses Show
By Michael Marinez, Automotive News
NADA sees opportunities to work with the Trump administration on a range of priorities in the coming years, from reducing EPA greenhouse gas requirements to rescinding the Federal Trade Commission’s so-called vehicle shopping rule.
Paul Metrey, NADA’s executive vice president for public policy, said the organization also hopes to continue elements of a tax cut enacted in President Donald Trump’s first administration and to reduce red tape hampering dealers’ businesses.
“The conversations are encouraging,” Metrey said January 25 at the NADA Show. “There’s a real recognition that there have to be things done to make sure the regulatory state is not strangling the industry and that dealers and consumers can conduct transactions with a minimum of governmental interference.”
One of NADA’s top priorities this year involves the FTC’s Combating Auto Retail Scams Rule. NADA says the rule, which set specific requirements for advertising, record keeping, customer interactions, and lineups of finance-and-insurance products and other add-ons, is untenable.
“There are multiple disclosures that have to be made. They are time-consuming, they are convoluted, and when they’re convoluted that’s a massive problem because there are massive penalties for noncompliance,” Metrey said. “You take an unclear mandate and heavy penalties with it, and there are a lot of exposures for honest businesses.”
Metrey said NADA’s goal is to either nullify the rule or eliminate funding to enforce it.
Another top priority involves altering regulation of electric vehicles. NADA hopes to revoke the EPA waiver that lets the California Air Resources Board set more stringent emissions rules. It also aims to ease the EPA’s greenhouse gas requirements and work with the White House to phase out EV tax credits.
“We’ve got to bring things to a level of sanity here where these things can be achievable,” Metrey said. “Move forward with electrification but do it at a pace that works in the marketplace. Not some artificial pace that’s going to create all kinds of problems in the industry.”
Newly elected U.S. Sen. Bernie Moreno, an Ohio Republican and former car dealer, including in Ohio and Massachusetts, told dealers at the NADA Show that he wants to revoke EV tax credits
of up to $7,500 per vehicle, which Trump has also suggested.
“We have to stop incentivizing one powertrain over another,” Moreno said in a video message shown on stage January 25. “These subsidies for electric vehicles, it doesn’t make any sense whatsoever, especially when you’re talking about leasing expensive electric vehicles with taxpayers on the hook for $7,500. We’re going to get rid of those, but we’re going to get rid of it in a meaningful and orderly way — not like Canada or Germany — but in a way that allows car dealers to sell through the $7 billion of electric vehicles they have in inventory today.”
Moreno also called for certainty around emissions rules.
“We can’t have standards go from one extreme to the other every election cycle,” he said. “We need a broad horizon for car companies to plan.”
Trump, in his first week in office, signed an executive order revoking a Biden-era order that set a target for half of all new pas-
“We can’t have standards go from one extreme to the other every election cycle. We need a broad horizon for car companies to plan.”
senger cars and light trucks to be zero-emission by 2030. Trump also called for a pause in the release of funds under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, although it’s possible those demands will face legal challenges.
Metrey said NADA is prepared to work with officials on both ends of the political spectrum because some of what it wants may not be achievable through executive orders or while Republicans hold only slim majorities in both houses of Congress.
“We’re encouraged,” he said. “We think many of our priorities can be advanced, however it’s going to require, in many cases, bipartisan support and also some time on the executive branch and administrative side.”
Moreno said his priority is to create a “resurgence in automotive manufacturing” in the U.S.
“We have a lot of work to do,” he said. “With your support, we’ll get through this year and the next years, and the golden age of automobiles is right around the corner.”
Previous Massachusetts TIME Dealers of the Year
1970 Fred Cain, Finalist
1971 John Dugan
1972 Robert Brest
1973 Peter Fuller
1977 Herb Anderson
1978 Julian Lucini, Finalist
1979 Joseph Gill
1980 Nathan Shulman
1981 George Rowe
1982 Donald Lorenz
1983 Richard Bournival
1984 Argeo Cellucci
1985 Charles Long
1986 John Mirak
1987 Daniel Harrington
1988 Edward Amabile
1989 William Cammarano
1990 John “Jack” Swanson
1991 Jerry Couture
1992 George Luddy
1993 Ed Ciampa
1994 George Albrecht
1995 John Walsh
1996 Jay Tracy
1997 Thomas Barenboim
1998 John Santilli
1999 Daniel Quirk
George Luddy
Thomas Keery II
Donald Rodman, Finalist
Jack Sarat 2006 Marshall Jespersen
2007 Ernest Boch, Jr.
2008 Herbert Chambers
2009 Beth Lorenz
2010 Richard Mastria, Jr.
2011 William Deluca III
2012 Ann Regan
2013 Raymond J. Ciccolo
2014 Brian Kelly
2015 Scott Shulman
2016 Adam Connolly
2017 Gary Johnson
2018 Frank Hanenberger
2019 Don Sudbay, Jr.
2020 Raymond J. Ciccolo
2021 Christine Alicandro, Finalist
2022 Joseph Shaker
2023 Gary Rome, National TDOY Winner
2024 Thomas Murphy, Jr., Finalist
2025 George Haddad, Finalist
NEWS from Around the h orn
LAWRENCE
deLuca Family Trust Awards
$80K in scholarships to Boys & Girls Club Members
The Bill DeLuca Family Charitable Trust is proud to share its continued commitment to the local community by awarding $80,000 in college scholarship funds to the Boys & Girls Club of Lawrence. This marks the fourth consecutive year for these scholarships, which will be awarded to two club members for their hard work, dedication, and resilience in their pursuit of academic success. The funds will directly support their college tuition, helping to reduce financial barriers to higher education.
The Boys & Girls Club of Lawrence plays a pivotal role in the community, offering a safe and nurturing environment for young people to learn and grow into productive, caring, and responsible citizens. From academic enrichment and healthy lifestyles to character-building and leadership, the Club offers hundreds of programs and experiences each year to more than 1,000 members and serves dinner to more than 300 kids each day.
“Our partnership with the Bill DeLuca Family Charitable Trust is one we deeply cherish,” said Markus Fischer, Executive Director at the Club. “We believe in the power of education to transform lives, and this scholarship can dramatically change the trajectory of a young person’s life.”
From the scholarships’ announcement: “The Bill DeLuca Family Charitable Trust remains dedicated to supporting programs that uplift and empower youth in Lawrence. The DeLuca Family Trust is grateful for the opportunity to partner with organizations like the Boys & Girls Club of Lawrence. It is an honor to support their mission and the growth of the incredible young individuals they serve.”
Ford Honors Marcotte in 2025 salute to dealers Winners
For 25 years, Salute to Dealers has remained the pinnacle Ford Motor Company award to recognize Ford and Lincoln Dealer Principals for their charitable giving. Started by Edsel B. Ford II, the award originally honored U.S. dealers until 2011 when it expanded globally. Since the inaugural awards, 166 dealers from 20 countries have been recognized. The current program is championed by Edsel’s son, Henry Ford III.
This year, six dealers from the United States, Canada, China, and Malaysia were named honorees at a reception in New Orleans on January 24, including Mike Marcotte of Marcotte Ford in Holyoke. Mike was honored for his work with the Boys & Girls Club of Greater Holyoke, Inc. the Children’s Museum at Holy-
EASTON silko VW opens in New Facility
On January 27, Adam Silverleib kicked off the opening of the dealer group’s new Volkswagen dealership at 661 Washington Street in Easton. It sits on 4.5 acres and is 27,400 sq. feet.
In a statement announcing the new facility, Silko VW posted the following: “Silko VW warmly invites you to visit our dealership to our new state-of-the-art facility at 661 Washington St. in Easton. Our goal is to redefine the car-buying journey, ensuring it’s a delightful experience every step of the way. We’re confident that you’ll discover the perfect vehicle at a price that suits your budget. Explore our comprehensive range of new VW models or seize an excellent deal on a dependable pre-owned vehicle. For top-notch auto maintenance and repairs near South Easton trust our skilled technicians in VW service.”
NEW ORLEANS, HOLYOKE
from left: Board member Henry ford iii, dealers turse zuhair nahason Affan, Ed Bloom, and Mike Marcotte, and Elena Ford, chief dealer engagement officer. (FORD MOTOR CO.)
oke; the LugNutz Café; Providence Ministries; Kate’s Kitchen; and Margaret’s Pantry.
“It was an incredible experience and honor to receive the 2025 Salute to Dealers Award,” stated Marcotte. “Ford chooses six winners from out of the 10,000 total dealer body across the globe and three winners are from the United States. It was truly an honor.”
“I was very proud to accept the award on behalf of Marcotte Ford, family, and the entire 150-team members here at the Dealership that all do so much to give back to the community that has been so good to us,” Marcotte said.
Each winner will receive a custom portrait that will also be displayed in Ford World Headquarters for the duration of the year.
For more than 120 years, Ford and its global dealers have shown up for the communities where they live and work.
“For 25 years, the Salute to Dealers award has highlighted the incredible work our dealer network does to support the communities they serve,” company board member Henry Ford III said in a statement. “This year’s honorees exemplify the spirit of giving and the positive impact we can have when we work together to build stronger, more vibrant communities. Their dedication inspires us all, and we are proud to recognize their exceptional contributions.”
NEWS from Around the h orn
NEW ORLEANS
Automotive News Honors 40 Under 40, including Massachusetts’s Charlie sectish
Automotive News’ 13th 40 Under 40 class, a group of talented and dedicated leaders blazing paths in automotive retail, features honorees who grew up in the industry and those who found a career in automotive retail later in life. Their accomplishments are many – from managing costs and increasing profits to improving employee retention and boosting customer satisfaction. They have fostered positive workplace cultures, promoted mentoring, and embraced a more diverse workforce.
One such honoree from Massachusetts – Charlie Sectish, age 38, General Manager of Bernardi Honda in Natick – is profiled here (by Carly Schaffner, Automotive News):
When Charlie Sectish applied for a summer sales job at Bernardi Honda in Massachusetts in 2007, he didn’t think his decision would guide the rest of his career.
“I was going to school, and during the summer helped my parents relocate to Boston. I took a job at the dealership, but after getting a paycheck for $10,000, I told my parents I was going to take a hiatus,” Sectish said about his introduction to the business of selling cars. “ The hiatus is ongoing,” he joked.
Now general manager, Sectish has poured over enough accounting manuals — including material published online by General Motors — that he may as well have an honorary degree on the topic.
He was able to bring expenses down from just over $15 million in 2018 to a 10-year low of $13.4 million in 2023. At the same time, Bernardi Honda generated an additional $5.23 million in gross profit.
Part of the savings came from changing from a vehicle gross compensation plan to one based on volume after pandemic shortages tripled employees’ pay.
Sectish’ s management style to “lead from the front” also helped stop voluntary turnover, which he said was crippling the culture. “I made myself easily available to every employee in person or over the phone, or via text or email,” he said. “If you need me to go clean something up, if you need to go do whatever it is, if you’re having problems, if you want to talk to somebody, I’m here.”
Bernardi Honda is near Boston in Natick and is operated by Bernardi Auto Group, which has four other stores in the region.
Sectish said he started unconventionally. After a few months on the sales floor, he requested to be moved into the business development center, where he kept himself as busy as possible for the next five years. “It gave me an opportunity to create my own store within a store, which was cool at the time,” he said.
The business development center gave him insight into what it was like working at the lower end of the pay scale, which prepared him for future leadership roles, Sectish said.
After mastering the center, he moved into a sales manager position for a year, then took the general sales manager role at Bernardi’s Toyota store. He worked there for 18 months, then moved back to Bernardi Honda to take over as general manager.
Sectish said the post allowed him to get more exposure to service and parts. Short of learning how to become a technician, he said, the general manager post was an opportunity to continue to develop and learn that side of the business.
Since taking the helm in 2019, Sectish has reached several notable milestones. Finding a lagging net profit on his return prompted him to execute a larger strategic overhaul focused on reducing expenses and increasing gross profit.
Adding a retention bonus to incentivize good salespeople to stay when he changed the pay structure also helped form a cohesive and engaged team. The retention bonus was eventually expanded to include finance and insurance contractors, service advisers, and technicians.
Sectish led the dealership through the pandemic and the inventory shortages that followed. Despite volatility throughout the industry, his team was able to achieve a 34 percent increase in new-vehicle sales between 2022 and 2023, as well as a 20 percent increase in used-car sales in the same period.
Sectish doesn’t see himself going anywhere soon. “I like what I do. I like the people that I surround myself with every day,” he said.
“I have been having so much fun, certainly over the last couple of years, trying different things as the market changes. I’ve really just been focused on running my store.”
NEW ORLEANS
decline in dealership Pretax Profit Slowed in Final Months of 2024, Report shows
By C.J. Moore, Automotive News
Net pretax profit for the average U.S. franchised dealership fell in 2024, but that decline leveled out in the last three months of the year, according to data from Presidio Group and NCM Associates.
Profitability for the average store fell 24 percent in 2024 compared with 2023 — a notable improvement from a 30 percent
decline in the first nine months of the year, Presidio and NCM said.
The average franchised dealership is moving toward a new normal in profitability — higher than what was typical before the COVID-19 pandemic began. Data from Presidio, an investment banking and buy-sell advisory firm in Atlanta and Denver, and NCM, a dealership training and consulting company in Kansas City, Missouri, showed profitability varies by vehicle brand and geography.
Presidio Group compiled the average dealership performance benchmark report based on financial results of about 3,900 U.S. franchised dealerships of all brands and sizes that work with NCM.
“The latest evidence, both from the Presidio-NCM data and Presidio’s year-end dealer survey, indicates that the auto retail sector is at the tail end of the Great Normalization,” Presidio Group President George Karolis said in a statement.
“Dealers are more optimistic about their future profits heading into 2025, and we expect their new normal will include profitability that stabilizes at levels well above pre-pandemic benchmarks, at least for certain brands.”
Average dealership profit in 2024 was 1.9 times the level in 2018 and 1.7 times the level in 2019, according to Presidio’s analysis.
The number of stores contributing to Presidio and NCM’s data
represent more than one-fifth of the estimated 18,000-plus franchised dealerships in the U.S. The average store posted the following results in 2024:
• New vehicles sold rose 2.8 percent to 883.
• Used vehicles sold was flat at 729.
• Gross profit per new vehicle retailed fell 33 percent to $2,247.
• Gross profit per used vehicle retailed fell 16 percent to $1,399.
• Finance and insurance income per vehicle retailed rose 0.3 percent to $1,581.
• Total revenue per store rose 0.7 percent to $83.9 million.
Service and parts gross profit continues to be a growth area, with the typical store seeing a 4.7 percent jump in 2024. Dealerships are using fixed operations gains to offset the rapid falloff in variable gross profit margins in 2023 and 2024, Karolis said.
Dealership fixed costs pushed higher by inflation remained a challenge, Karolis said. Personnel costs fell just 0.2 percent for the average store because a “relatively strong labor market persists,” according to Presidio. Advertising expenses rose 3 percent, and floorplan interest expense rocketed to $142,203 in 2024 compared with a credit of $9,820 in 2023.
New-vehicle profit margins varied widely by segment in 2024: Average gross profit was $5,679 for a luxury vehicle, $1,952 for a domestic brand vehicle and $1,699 for an import brand vehicle.
401(k) Compliance – Avoiding Costly Mistakes
By Mathew Brand
CPA, Albin Randall & Bennett
Why Compliance Matters
For car dealership owners, offering a 401(k) plan is a strategic way to attract and retain top talent while supporting employees’ long-term financial security. However, administering a 401(k) plan comes with significant responsibilities. Regulatory compliance is critical. Failure to adhere to the rules can expose a dealership to fines, additional contributions, and potential damage to employee trust. Errors, even if unintentional, can lead to costly corrective measures and increased scrutiny from the Department of Labor (DOL).
Dealership owners need to understand common compliance challenges and the steps required to avoid operational failures.
Understanding Compensation Definitions
One of the most common mistakes in a 401(k) plan involves the definition of compensation. Each plan’s adoption agreement specifies what constitutes “plan compensation,” which can include wages, bonuses, commissions, and other earnings. If certain types of compensation are excluded, this must be clearly stated. Dealerships must ensure that employee deferrals are calculated accurately based on this definition.
If the plan defines bonuses as part of compensation but deferrals are not withheld, this creates a compliance issue. Dealers should work with their plan administrator to regularly review the adoption agreement and ensure it reflects current practices.
Another common issue arises from errors in payroll systems. Pay codes used for infrequent payments, such as one-time bonuses or special commission payments, may not be properly configured to account for deferrals. Dealers should implement strong payroll controls and conduct periodic audits to ensure all types of compensation are appropriately coded.
Handling Deferral Changes
When employees update their deferral percentages through the plan’s participant portal, those changes must be accurately reflected in payroll. Delays or mistakes in processing these changes can lead to under- or over-contributions, both of which require correction.
Errors are more likely when plans allow deferral changes with every paycheck. While this flexibility benefits employees, it increases administrative complexity. Dealerships can mitigate this risk by amending their plan to limit deferral changes to quarterly or semi-annual intervals. Automating the integration between payroll systems and the plan’s recordkeeping system can also help ensure changes are implemented accurately and on time.
Timely Remittance of Contributions
The DOL requires that employee contributions withheld from paychecks be remitted to the plan’s trust as soon as administratively feasible. This standard is not only about timeliness but also about consistency. If a dealership demonstrates the ability to remit contributions within two business days, the DOL expects this timeline to be maintained consistently.
Inconsistent remittance schedules can trigger regulatory scrutiny. Dealerships should establish clear processes and designate backup personnel to handle remittances during staff absences. Automating the contribution remittance process through payroll systems can further reduce the risk of delays.
Maintaining detailed records of remittance dates is essential. These records provide evidence of compliance during plan audits and can protect the dealership in the event of a DOL investigation.
The Role of Advisors
Dealers do not have to navigate the challenges of administering a 401(k) plan alone. Third-party administrators (TPAs) are valuable partners in plan design and ongoing management. They can provide guidance on critical aspects, such as defining compensation and interpreting plan documents. However, it is important to note that the
dealer is responsible for the accuracy of the information provided to the TPA.
Certified Public Accountants with expertise in employee benefit plan audits are another key resource. They can help identify compliance issues and recommend corrective actions before they escalate. Dealers should consider consulting legal counsel specializing in Employee Retirement Income Security Act law to stay informed about regulatory changes that may affect their plan.
Preventive Measures for Compliance
Proactively addressing compliance risks can save dealerships significant time and money. Here are some best practices:
• Conduct Regular Reviews: Annual reviews of the plan and payroll processes can help identify discrepancies and ensure all procedures align with regulatory requirements.
• Invest in Training: Educating payroll and administrative staff about the plan’s rules and the importance of compliance reduces the likelihood of errors.
• Leverage Technology: Automating processes, such as deferral changes and contribution remittances, minimizes manual errors and ensures timely execution.
• Engage Experts such as experienced TPAs, CPAs, and legal advisors with specialized knowledge.
The Road Ahead
A compliant 401(k) plan is more than a regulatory obligation; it is a reflection of a dealership’s commitment to its employees. By understanding common pitfalls and implementing preventive measures, dealerships can protect themselves from costly mistakes while fostering employee trust. With careful planning and the support of knowledgeable advisors, dealership owners can confidently manage their 401(k) plans, ensuring they remain valuable assets for both the business and its workforce. Proactive compliance management not only safeguards the dealership from regulatory penalties but also strengthens its reputation as an employer of choice.
Tax Strategies for Dealerships – Cost Segregation
By Martin Harski Principal, Withum
Owning a car dealership can present a golden opportunity to reduce your tax liabilities. One such opportunity is cost segregation, allowing dealerships to speed up depreciation deductions, which can lead to significant tax savings early on. In this article, we will break down cost segregation, explain how it works, and show why it is crucial for improving your cash flow and overall financial bottom line.
What is Cost Segregation?
Cost segregation is a tax strategy involving an engineering-based analysis that identifies, segregates, and reclassifies various property components that can be written off faster than others instead of spreading out the depreciation over 39 years. Cost segregation allows you to classify certain portions of the property, such as parking lots, showrooms, service centers, and offices, into shorter depreciable periods, such as 5, 7, or 15 years. This means larger deductions early on, which can reduce your taxable income and free up cash for other investments.
How Does Cost Segregation Work?
A cost segregation study is typically conducted by cost segregation specialists, engineers, construction professionals, and/ or tax experts who specialize in this field and follow IRS guidelines. The studies typically are completed in several steps:
• Initial Property Assessment
• Property Inspection
• Obtain and Review Necessary Project Information and Documentation
Bonus depreciation is a tax incentive created by Congress that allows businesses to immediately deduct a significant portion of eligible assets purchased, constructed, and/or renovated rather than writing them off over the asset’s “useful life.” The rules and limitations have evolved over the years, and, in 2017, the law changed
again, which allowed for a 100% deduction for qualified assets through the end of 2022. As part of the change in law, bonus depreciation is scheduled to be phased down to zero in 20% increments from 2023 through the end of 2026. Starting in 2027, bonus depreciation will be suspended again unless Congress acts.
Examples of Assets that Qualify for Bonus Depreciation
Assets that qualify for bonus depreciation include, but are not limited to, furniture and fixtures, service equipment, land improvements, interior improvements, and specialized HVAC, pumbing, and electrical systems.
What is a Section 179 Deduction?
This deduction is another key tax incentive allowing dealerships to deduct the full cost of new and used qualifying equipment, software, and other assets in the year they were purchased rather than depreciating them over their “useful life.” In 2024, the maximum deduction is $1.12 million, with phase-out limits of $2.8 million.
Impact of Interest Limits on Bonus Depreciation
Bonus depreciation and business interest deductions are interrelated and can impact how dealerships optimize their tax strategy. Even with interest expenses, a dealership can still benefit from bonus depreciation, but they need to ensure their total interest expense stays below certain thresholds to maximize deductions. Regularly reviewing your interest expenses and adjusted taxable income is a smart tax planning strategy.
Case Study Examples
• A dealership recently constructed a property for $12 million. By identifying $3.5 million of assets to shorter depreciable tax lives, the dealership realized over $2.3 million in first-year depreciation deductions (with the help of bonus depreciation) and over $680,000 in tax savings during the first year, boosting their cash flow and profitability.
• A dealership never performed a cost segregation study on a property they purchased for $15 million back in 2021.
By performing a look-back study on the property, the dealership was able to reclaim the missed deductions from prior tax years. By identifying over $4.4 million of misclassified assets and the recovery of the understated depreciation deductions from prior and current tax year(s), the dealership realized over $4.4 million of depreciation deductions (with the help of bonus depreciation) and over $1.2 million in tax savings in 2024, thereby increasing their financial bottom-line.
• A dealership recently remodeled their facility for $5 million. By identifying $3.6 million of assets to shorter depreciable tax lives, the dealership realized over $2.2 million in first-year depreciation deductions (with the help of bonus depreciation) and over $650,000 in tax savings during the first year. An additional benefit of the remodel was the portion of assets that were demolished to make way for the remodeling of the building, the dealership was able to write off completely the remaining basis of those demolished assets in the year they are retired. The financial benefits to the dealership was beneficial in helping to increase their cash flow and profitability. Additional Financial Benefits
• Electric Vehicle Charging Stations: Tax credits are available for installing EV chargers, potentially providing a credit of up to 30%, based on certain requirements and capped at $1000,000 per station.
• Solar Panel Systems: Similar to EV chargers, solar panel systems can qualify for tax credits up to 50%, based on certain requirements.
• Both the EV chargers and solar panel systems are also eligible for bonus depreciation on top of the tax credits at reduced rates.
Conclusion
If you are a dealership, it is worth exploring whether cost segregation is right for you and your property. For more information, please reach out to Martin Harski at mharski@withum.com.
Navigating Business Interruption Claims for Automotive Dealerships
By Samantha Millard
Axiom Advisors, sm@axiom-auto. com
Automotive dealerships operate in a dynamic environment where unforeseen events, such as natural disasters, data breaches, or other disruptions, can significantly affect operations. Business interruption insurance is designed to provide financial relief in these situations. For example, last year’s CDK outage was covered under most dealers’ business interruption policies. However, successfully filing a claim and recovering losses can be complex, particularly if you do not understand the nuances of your insurance policy.
If your dealership sustains an unforeseen loss, this article will provide you with a guideline of where to start in determining the legitimacy of your claim, the coverage amount, and necessary documentation.
Understanding Business Interruption Insurance
Business interruption insurance typically covers the loss of income a business suffers due to an unforeseen event or disaster that temporarily halts operations. It is not a stand-alone policy but is often included as an endorsement to a commercial property policy or a comprehensive business owner’s policy. For dealerships, this coverage can be critical for offsetting revenue losses while repairs are made, or operations are restored.
Step 1: Analyze Your Insurance Policy. The first step in determining whether an event qualifies for business interruption
coverage is to carefully review your insurance policy.
• For dealerships, common risks might include theft, weather-related damage, or even cyberattacks on dealership management systems.
• Many policies have a waiting period before coverage begins. This period acts as a deductible in time rather than money and typically ranges between 24 and 72 hours.
• Check the policy limits, which dictate the maximum payout for your claim.
• Determine the type of qualifying event. Sometimes there may be similarities between defining events and definitions
all affected areas, including your showroom, service bays, and vehicle inventory. Maintain a record of any repairs, clean-up costs, or temporary measures you implement to continue operations. For example, scan and save any receipts or invoices applicable.
• Collect Financial Records. Compile your dealership’s financial documents, such as profit and loss statements, tax returns, payroll records, and related assets or inventory schedules. These records are critical for proving lost income.
• Work with an Insurance Adjuster. The insurance company will assign an adjuster to evaluate the claim. Be prepared
that appear to overlap. If unsure which category your circumstance falls within, consult your insurance company.
Step 2: File a Business Interruption Claim. After reviewing your policy and determining that the event is covered, you can proceed to file a claim. Here is a stepby-step approach:
• Notify Your Insurer Immediately. Contact your insurance provider as soon as the event occurs. Delays in reporting could result in claim denial.
• Document the Damage. In the event of physical damage causing the interruption, take photographs and videos of
to provide them with all requested documentation and work collaboratively to expedite the process. Be ready to supply documents as far back as two years prior to the interruption.
• Consult a Professional. Engage thirdparty insurance experts to review your claim and ensure all aspects are appropriately addressed. This typically involves retaining legal counsel and a forensic accountant.
Step 3: Determine Business Losses. Calculating losses for a dealership can be particularly complex, given the variety of revenue streams, including vehicle sales,
For dealerships, common risks might include theft, weather-related damage, or even cyberattacks on dealership management systems.
service, parts, body shop, and finance and insurance income. A forensic accountant can help document and quantify losses to present a strong case to your insurer. If you have consulted a professional, as suggested, they will be able to assist you with the following:
1. Calculate Lost Revenue. Compare your revenue during the disruption period to the trailing twelve months prior to the interruption to establish a baseline. It is important to communicate any underlying causes for significant financial statement fluctuations to your accountant so they may exclude anomalies or time periods from the claim or adjust for current profitability that maybe be higher due to operating changes within your dealership.
2. Account for Extra Expenses. Include any additional costs incurred to keep the business running, such as leasing temporary office space, renting equipment, feeding staff, and temporary pay increases.
3. Include Ongoing Expenses. Fixed costs are often covered, provided they are incurred during the interruption period. These costs may include payroll, rent, utilities, and insurance premiums.
Common Pitfalls in Business Interruption Claims:
• Inadequate Documentation. Without clear records, your claim may be delayed or denied. Maintain meticulous records before, during, and after the event.
• Misinterpretation of Policy Language. Insurance policies are often filled with legal and technical jargon. Seek expert advice if you are unsure about any terms or conditions.
• Underinsurance. Regularly review and update your policy to ensure your coverage limits reflect your dealership’s growth and current valuation.
• Delays in Filing. Many policies have strict deadlines for filing claims. Act
promptly to avoid missing these deadlines.
Conclusion
Business interruption insurance is a lifeline for automotive dealerships facing unexpected disruptions. By thoroughly understanding your policy, recognizing qualifying events, and following best practices for filing a claim, you can maximize your chances of recovering losses. The key to a successful claim lies in preparation: maintaining accurate records, seeking professional guidance, and understanding your policy’s intricacies.
For automotive dealerships, resilience often means anticipating the unexpected. Equip yourself with the knowledge and tools to navigate the claims process effectively, ensuring that your dealership can weather any disruption and emerge stronger on the other side.
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By Attorneys Tom Vangel, Jamie Radke, and Lindsey McComber, Harris Beach Murtha Cullina PLLC
The Minnesota Automobile Dealers Association (MADA) recently filed a lawsuit against Volkswagen for violations of Minnesota’s dealer protection statute (the “Dealer Act”) and the recently enacted Fair Reimbursement Statute due to Volkswagen’s failure to fairly compensate Minnesota Volkswagen dealers for warranty work they have performed.
In addition to claiming that Volkswagen unlawfully refused to adequately reimburse dealers for diagnostic work, MADA alleges that VW improperly attempted to impose additional non-statutory requirements on dealers exercising their rights under the Dealer Act.
Given that many Massachusetts dealers have faced similar issues with manufacturers failing to properly compensate them for warranty work under Massachusetts law, the Minnesota lawsuit provides an interesting case study.
Minnesota’s Fair Reimbursement Statute states that “[c]ompensation for warranty labor must equal the dealer’s effective non-warranty labor rate multiplied by the time guide used by the dealer for non-warranty customer-paid service repair orders.”
It further states that “[c]ompensation for warranty labor work must include all diagnostic time for repairs performed under this section, including but not limited to all time spent communicating with the manufacturer’s technical assistance or external manufacturer source in order to provide a warranty repair, and must not be less than the time charged to retail customers for the same or similar work performed.”
This statute requires manufacturers to reimburse dealers based on independent third-party time guides that dealers use for non-warranty customer-paid service repairs, rather than the time guides imposed by manufacturers that are considered to be “self-serving and intentionally downwardly biased” in order for manufacturers to
avoid their warranty reimbursement obligations.
In its complaint, MADA brings two causes of action against VW. In its first count, MADA requests a declaratory judgment stating that VW’s warranty reimbursement practices are in violation Minnesota’s Dealer Act. In its second count, MADA seeks to enjoin VW from continuing to violate the Fair Reimbursement Statute by “unlawfully refusing to use a dealer’s time guide without imposing unlawful, onerous conditions.”
The complaint alleges VW has imposed its own time guides on dealers in order to determine the reimbursement paid to a dealer for warranty repair despite the Fair Reimbursement Statute allowing dealers to use a third-party time guide. Specifically, it alleges that VW has stated that it will only pay the claim based on “Suggested Repair Times” which are generally lower than flat rate hours that VW dealers use based on the independent time guides. As a result of this, MADA alleges that this inevitably provides for a lower time allowance for repairs than the time allowances provided by independent, third-party time guides, which makes the reimbursement for warranty repairs lower than the fair market value for the labor used in warranty repairs.
The complaint also alleges that VW’s practices have violated the Fair Reimbursement Statute, which only requires the dealer to notify VW of the time guide it is using and does not require dealers to provide any additional information to VW. However, VW has stated that it will “evaluate any requests for reimbursement based on the statute if, and only if, the dealer provides the following additional information to Volkswagen: (a) the month/year when the dealer began using the selected third-party time guide for repairs and, if it began using this third-party time guide for retail repairs on VW vehicles within the last 12 months, an
explanation of the time guide that was previously used and the reason for changing to a new time guide; and (b) one hundred sequential non-warranty, customer-paid repair orders closed during the fourth month period immediately preceding the request, each showing the labor time charged to the customer pay repairs and the actual time the technician(s) spent on the repair. MADA claims that these requirements imposed by VW violate the plain words of the statute.
Like Minnesota’s Fair Reimbursement Statute, Massachusetts has similar protections for dealers performing warranty work under MGL Chapter 93B, the Massachusetts dealer franchise law. Chapter 93B, Section 9(b)(1) provides that a “manufacturer or distributor shall…adequately and fairly compensate any motor vehicle dealer who, under its franchise obligations, furnishes labor, parts and materials under the warranty or maintenance plan, extended warranty, certified preowned warranty or a service contract, issued by the manufacturer or distributor or its common entity[.]” As such, the statute requires that dealers are given “fair and adequate compensation” and are reimbursed at retail rates and prices that dealers customarily charge.
While this case is still in the early stages of litigation, manufacturers across the country have implemented similar requirements that could violate state franchise law and negatively impact dealers. As such, this case serves as a reminder that Massachusetts dealers should carefully review the protections they are afforded under Chapter 93B and be cognizant of how they are being reimbursed for warranty work
Tom Vangel and Jamie Radke are partners and Lindsey McComber is an associate with the law firm of Harris Beach Murtha Cullina in Boston who specialize in automotive law. They can be reached at 617-457-4072.
Know Before You Sign!
By Gregory S. Paonessa, Esq. Partner, ArentFox Schiff LLP
In Massachusetts, it is well understood and accepted that, absent fraud, deceit, or illegality of its terms, one who signs a contract, regardless of if they understand its terms, are bound thereby. This applies equally, if not with greater force, to experienced businesspeople, including automobile dealership personnel.
Of course, in the business context, there are issues such as authority to bind the party one is signing on behalf of. However, if personnel who typically have the authority to bind (perhaps a general manager) are the signatory, it will be difficult to escape the grasp of the agreement entered into. It is for these reasons that you must have well-defined policies in place concerning who has the authority to bind your organization.
You also must be sure to always understand the contractual provisions you are agreeing to and the impact they can have on your business. In many instances, a short discussion with your legal counsel can help avoid headaches down the road.
There are certain contractual provisions that should always raise an eyebrow, be scrutinized, and the potential fallout from their application assessed to the fullest extent possible. A few of those are limitations of liability, data sharing/data privacy provisions, and forum selection clauses.
Limitations of Liability
Limitations of liability are generally enforceable under Massachusetts law. This follows the tenet of freedom of contract. In many instances, limitations of liability in service contracts limit recovery
to the amount paid under the agreement, perhaps for the life of the agreement, or in certain instances only a portion of time. Limitations of liability are one such provision that dealers should be acutely aware of and should evaluate fully before agreeing to, including discussions with your legal counsel to understand the full impact such clauses could have.
Imagine that a key service provider of yours shuts down for weeks or months (ring any bells?), severely limiting or altogether halting your operations. What are the daily costs and damages such an event could have on your business? Now, would you knowingly agree that in such a scenario, your recovery could be limited to one month’s fee that you pay that service provider, which could amount to, say, $40,000? Is that sufficient compensation for the damages caused to your business? I have to believe the resounding answer is NO! Then why agree to such a provision when your damages could be in the millions?
Data Sharing and Privacy
Data sharing and data privacy are huge areas of concern for government regulators and consumers alike. In addition to federal laws and regulations, Massachusetts, like most states, has laws and regulations in place concerning the storage and sharing of customers’ personal data.
Despite this, certain businesses, including manufacturers, are requiring dealerships to agree to license all right, title, and interest in a dealer’s data. This is troublesome for a host of reasons, including legal implications, and, in certain instances, “data ransom”, where a service provider refuses to release your data if you try to change providers.
Given the myriad of legal and business operation issues that agreeing to share or, worse, license your customers’ data can involve, it is crucial to know and understand exactly what you are agreeing to share and who retains ownership of your
client data. Speak to your counsel if it is unclear what your obligations are concerning customer data.
Forum Selection
Similar to limitations of liability, forum selection clauses are regularly enforced if they provide for exclusive jurisdiction in a particular forum (i.e., where you must fight it out if a dispute arises concerning the contract at issue – think arbitration in Chicago, or state or federal court in California). While such venues may be beneficial to the other party to the contract, I have to believe that each of you, if you must fight over a contract, would prefer to do it here in the Commonwealth. This is where your documents, witnesses, counsel, businesses, and your homes are. Otherwise, it means added cost and disruption to your business, having you and your witnesses travel half, or all the way across the country, to fight for your rights.
Understanding your general rights and obligations under a contract and the impact the contractual terms can have on your business is crucial to the successful operation of your dealership. This is particularly true in the manufacturer/dealer relationship and in dealing with manufacturers’ ancillary businesses. Always keep in mind that only franchise obligations are regulated pursuant to MGL Chapter 93B. Therefore, before entering into agreements with manufacturers’ ancillary businesses you believe are mandatory, confirm that such agreements are franchise obligations and not merely voluntary service offerings.
What is abundantly clear is it is crucial to always Know Before You Sign! t
Gregory S. Paonessa is a partner with ArentFox Schiff LLP’s Automotive legal practice located in Boston. He can be reached at (617) 973-6186 or Gregory. Paonessa@afslaw.com.
What to Expect Under Trump’s Second Term
By Jeff Fritz, Esq. and Joshua Nadeau, Esq.
Partners, Fisher & Phillips LLP
The People have spoken. By the time this article is published, Donald Trump will have returned to the White House as the 47th President of the United States. What should your dealership expect in the realm of labor and employment law under Trump 2.0?
Overtime Rule
As you may recall, under the Biden Administration, the U.S. Department of Labor (DOL) extended overtime coverage to about four million additional workers by raising the salary threshold for the “white collar” exemptions (executive, administrative, and professional) in two phases: from about $35K (which has been the threshold since 2019) to about $44K effective July 1, 2024, and to about $59K effective January 1, 2025, with automatic adjustments every three years. In November 2024, a federal judge in Texas concluded the DOL exceeded its authority in promulgating this rule and enjoined its implementation, meaning the salary threshold remains at about $35K.
While the DOL under the Trump Administration clearly will not continue the fight to increase the salary threshold to the same degree as under the Biden Administration, it certainly is possible the DOL will take steps to implement a modest increase, as it did in 2019. Employers should pay attention to any changes to the salary threshold so they can make any necessary adjustments to ensure compliance upon any such effective date(s). Failure to do so can result in significant liability for wage-andhour violations, which may be brought on
a class or collective basis, with automatic treble damages under Massachusetts law, plus attorneys’ fees and costs.
Minimum Wage
While efforts to increase the federal minimum wage (currently, and since 2009, $7.25 per hour) have largely been a Democratic initiative, Trump’s 2024 campaign publicly supported raising workers’ wages. Accordingly, we would not be surprised to see a push for some sort of increase, but nowhere near the $15 per hour the Biden Administration supported. Of course, Massachusetts employers also have to comply with the Massachusetts minimum wage, which is currently $15 per hour, and we do not expect any increase to the federal minimum wage exceeding that level in the near future.
Independent Contractors
As you also may recall, last year the DOL rescinded a rule that made it easier (under federal wage-and-hour law) to classify workers as independent contractors (i.e., the “economic realities” test) in favor of a more difficult standard to satisfy, the “totality of the circumstances” standard, which resulted in more employees being classified as employees.
We expect the DOL under the Trump Administration will return to the economic realities test, which involves weighing five factors and determining whether the worker essentially is in business for him or herself (and, thus, a contractor) or economically dependent on the business for whom he or she is providing services (and, thus, an employee). These factors include (1) the nature and degree of the individual’s control over the work, (2) the individual’s opportunity for profit or loss, (3) the amount of skill required for the work, (4) the degree of permanence of the working relationship, and (5) whether the work is part of an integrated unit of production for the business.
That said, Massachusetts is one of a handful of states with an even more difficult to satisfy independent contractor test,
known as the ABC test. In Massachusetts, a worker is an employee unless he or she (1) is free from control and direction in connection with the performance of the service he or she provides; (2) the service is performed outside the usual course of the employer’s business; and (3) the individual is customarily engaged in an independently-established trade, occupation, profession, or business of the same nature as that involved in the service performed. Accordingly, while a worker may appropriately be classified as an independent contractor under federal law, he or she may be misclassified as such under Massachusetts law.
Workplace Safety
The Trump Administration also is likely to reduce government oversight on workplace safety issues. During its first term in office, the Trump Administration cut the number of inspectors to the lowest amount in OSHA’s history, declined to mandate employers to take any protective measures against COVID-19, and rescinded part of the electronic recordkeeping requirements. We expect more of the same over the next four years.
Paid Leave
In his first term, Trump approved a law permitting federal employees to take twelve weeks of paid parental leave. While there appears to be some momentum for a bipartisan paid leave law, we think implementation of a paid leave law on the federal level is unlikely. This is an area where many employers, including those in Massachusetts, already face a multitude of local and state paid sick leave requirements and federal lawmakers are likely to allow the issue to remain at the state level for the foreseeable future. As you know, in Massachusetts, eligible employees may be entitled to paid family and medical leave (administered through the Department of Paid Family and Medical Leave) and upwards of forty hours of paid sick leave per year.
Unlocking the True Value of Your Dealership
By Dave Clayman CEO, Twelve Points Wealth Management
As a car dealership owner, you have likely poured years of hard work into building a business that not only supports your livelihood but also serves as the foundation of your financial future. However, as you look ahead to the next chapter—whether it involves succession, selling, or expanding—one critical question often goes unanswered: Do you truly know what your business is worth?
With 80% of a typical business owner’s net worth tied up in their company, understanding its value is not just important, it is essential. Studies reveal that up to 98% of business owners do not have a clear sense of this value. That is where identifying the true value of your enterprise becomes a game changer. This pivotal first step is designed to lay the foundation for protecting what you have built, maximizing value, aligning goals, and ensuring a smooth and successful transition.
Why Business Owners Need the Identify Stage
Without a clear understanding of its value, you cannot make informed decisions about growth, succession, or sale. The Identify Stage focuses on uncovering the current state of your dealership, pinpointing opportunities for improvement, and aligning your goals with actionable strategies. This analysis includes putting an actual value on the qualitative aspects of your business, those intangible components that represent its “blue sky” value.
The “blue sky” number, a critical concept in the car dealership industry, reflects the goodwill and intangible assets that make
your business more attractive to buyers. These components often account for the premium value above the tangible assets, making up about 80% of a business’s overall value when an outside third party is evaluating it for acquisition.
This phase involves assessing three critical areas:
• Business Value: Determining the true value of your dealership, including both tangible assets (like real estate and inventory) and intangible assets (like customer loyalty, brand reputation, and franchise agreements). This process highlights the “blue sky” number that sets your dealership apart.
• Owner Readiness: Evaluating your personal and financial readiness to transition from the business. For many owners, stepping away from the business can be as emotional as it is logistical.
• Business Attractiveness: Gauging how appealing your dealership is to potential buyers or successors. Factors like profitability, operational efficiency, and market position play a critical role in this assessment.
Why This Matters...
The Identify Stage is essential because it provides clarity, reveals gaps, and prepares your business for transition.
• Know Your Value: Most owners overestimate their dealership’s worth. This stage gives you a precise understanding of your business’s true value, including tangible assets like inventory and intangible assets like customer loyalty, employee retention, and reputation—all of which contribute to the “blue sky” premium.
• Align Goals: It ensures your personal goals like retirement or family succession match the readiness and potential of your business. For instance, the goodwill tied to your dealership’s “blue sky” value can significantly impact your financial planning for retirement.
• Fix What is Broken: From outdated systems to high turnover, the Identify Stage
pinpoints weaknesses that could lower your business’s value and marketability. Addressing these improves operations, enhances customer satisfaction, and ultimately boosts your “blue sky” number.
• Stand Out to Buyers: Buyers and investors want profitable, well-managed businesses with growth potential. By leveraging your “blue sky” value—the goodwill, reputation, and customer loyalty you have cultivated—this stage positions your dealership as a standout opportunity.
Real-World Impact
Consider a car dealership owner who believed their business was worth $5 million but discovered through the Identify Stage that its value was only $3.5 million due to inconsistent profitability and high turnover. By addressing these gaps—investing in staff development, diversifying revenue streams, and improving customer experience—they increased their “blue sky” number significantly. Three years later, the dealership sold for $6 million, with a substantial portion of that attributed to the goodwill and intangibles captured in the “blue sky” premium.
Taking the First Step
The Identify Stage of the Value Acceleration Methodology is not just an optional first step; it is the cornerstone of either growth or a successful transition. It provides clarity, aligns goals, and establishes a roadmap for value growth. For car dealership owners, understanding the “blue sky” value of their business can be the difference between an average transaction and a life-changing one.
At Twelve Points Business Advisors, we specialize in helping business owners like you identify the true worth of their companies. Our process is built on effectively and accurately obtaining the right information to lay the foundation for strategic decisions and long-term success. Whether you are planning for succession, growth, or sale, our team is here to guide you through every step of the Identify Stage and beyond.
The latest updates on the nationwide telecommunications hack underscore the importance of utilizing secure communication methods at your dealership when handling sensitive customer information.
It has been revealed that a Chinese government-affiliated group named Salt Typhoon has infiltrated nearly a dozen major telecommunications companies, capturing sensitive data, such as call logs, audio intercepts, and text data for an unknown number of individuals. The attackers are believed to have exploited a combination of outdated infrastructure, misconfigurations, and vulnerabilities in government surveillance systems. Given the size of the telecom companies affected, this breach could affect many thousands of customers.
The intrusions into telecom companies are believed to have begun in 2023 and were first disclosed to the public in October 2024. Initially, the attackers managed to maintain persistence despite extensive eradication efforts by various governments and affected companies. Top telecom companies now claim they have eradicated the breaches; however, considering the scope of the incidents and the prolonged time it took to discover them, many experts remain skeptical.
The FBI and CISA are urging Americans to use encryption, with the Director
of the FBI stating that encryption is “an urgent public safety issue.” This is a stark reminder that the FTC Safeguards Rule requirement to encrypt customer information held or transmitted by your company is a legitimate security protection and not just a check-the-box item for implementation when it’s convenient. The function of encryption is to transform data into an unreadable form through the application of a cryptographic algorithm to prevent unauthorized access to the data. Standard text messaging uses SMS and MMS, which are widely used messaging protocols, but these protocols lack end-to-end encryption, leaving them susceptible to interception and unauthorized access by malicious actors.
While texting is a simple way to get your customer’s information, facilitating
However, the telecom breach highlights the risk of using text messaging is genuine. While it might seem unlikely that anyone is after this data, the telecom hack exemplifies that there are malicious actors with a strong interest in exploiting misplaced trust in the security of unencrypted messaging.
taking the care to process data using secure methods reduces your risk of fines related to noncompliance, protects your customers, and protects your dealer’s reputation.
a quick and convenient experience, taking the care to process the data using secure methods reduces your risk of fines related to noncompliance, protects your customers, and protects your dealer’s reputation. When the customer forgets his or her license and offers to send a picture of it via text message or texts the social security number or banking information to arrange financing, these are common scenarios many dealers have encountered.
When sending or receiving customer information, consider using encrypted mailing solutions to ensure secure communication. Start an encrypted email chain with the customer so the customer can send his or her message securely without extra steps. Many email platforms already offer encryption features or can integrate with tools that provide this functionality, making it easy to protect customer data while maintaining a streamline process. These emails can even include images and documents, ensuring all necessary information is securely shared.
Additionally, consider using corporate accounts on encrypted messaging platforms that allow customers who use these apps to send and receive sensitive information securely. It is important to stress that these should be corporate accounts, not personal ones, to ensure proper oversight and compliance with security policies. This approach provides a secure
option for customers while maintaining control over the communication process. Whenever possible, avoid using unencrypted text for sensitive communication, as it lacks sufficient security protections. Keep customer information restricted to corporate-owned devices with known security measures in place to further minimize risks.
It is easy to unknowingly mishandle sensitive information, and the common scenarios listed earlier emphasize just that. Training plays a critical role in addressing this issue. Review your flow of customer information with staff to determine how it is moving in and out of the company, and document it thoroughly. Identify any gaps or weak points and implement clear, practical solutions to help
staff securely receive, handle, and deliver sensitive information.
Equally important is providing training to ensure employees understand the significance of these measures. Rules without context or understanding are often ignored. Explaining the risks both to the customer and to the dealership in terms of compliance and potential legal consequences can make these rules more meaningful. Framing them in this way shifts them from feeling like just another arbitrary requirement to an essential part of protecting the business and its customers, which can boost internal adherence.
While the protection of customer information may add to your staff’s already full plate, the extra step, albeit small, requires some additional thought. Cus-
tomers, however, are often appreciative when they know you are taking their data security seriously. Explaining that you are using a secure method to handle their sensitive information can help them feel more confident in the process.
A common concern is that adding more steps will negatively affect the customer experience or create an unnecessary burden. Let us not forget, this is not just a business decision; it is the law. When you explain that encryption is required to protect customer data, it is easier to get buyin. “My hands are tied” becomes a lot less of an obstacle when everyone understands that it is not about convenience; it is about compliance and keeping both the customer and the business safe.
Cybersecurity Forecast 2025 - Navigating New Threats, Strengthening Defenses
By Scott Spatz President, Cooperative Systems
As we progress through 2025, the automotive industry continues to face a cybersecurity landscape that is both dynamic and challenging. Dealerships, in particular, face increased risks due to the vast amounts of personal and financial information they manage. In this article we discuss the latest cybersecurity threats that emerged in 2024 and outline effective strategies for dealerships to fortify their defenses.
The Evolving Role of AI in Cybersecurity
Artificial Intelligence (AI) has become a cornerstone of cybersecurity, enhancing threat detection and response capabilities. AI systems analyze large data sets to identify patterns and anomalies indicative of potential security breaches. These advanced technologies not only detect existing threats but also predict future vulnerabilities, enabling dealerships to proactively strengthen their defenses.
However, the sophistication of AI in cybersecurity is a double-edged sword; as dealerships leverage AI to improve security, cybercriminals use it to develop more complex attacks. This ongoing battle necessitates continuous updates to security protocols and investments in state-of-theart AI solutions.
Current Digital Threats and How to Counter Them
We have seen a rise in AI-powered attacks, particularly sophisticated phishing and ransomware. Cybercriminals are
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Leadership – Driven by Compliance
By Kaitlyn Paresi
Ethos Group
Leadership books, articles, and seminars are full of exciting words and concepts. Words like “growth”, “strategy”, and “vision” serve as inspirational reminders of the “why” behind building a business in the first place and motivation to strive for excellence and push toward goals.
Very rarely will someone be excited to hear the word “compliance,” let alone associate it with leadership. And yet, within any successful leadership framework, compliance is one of the foundational pillars, guised under a word that carries distinction: Integrity. Integrity and compliance have the same core values: morality, trust, and respect. However, we are proud to be defined by one of those words and figuratively roll our eyes at the other.
Compliance is not just “following the rules”. It is culture. It is character. It is leadership. And, perhaps shockingly, it is profitable.
Compliance means creating an environment where excellence, growth, and success are possible. You might have heard about “The Jump of the Flea” – a benchmark study that shows the height to which fleas can jump depends on the environment they are placed in. The higher the ceiling, the higher they go. It is the same for people: when you give your employees an environment that they can thrive in, the higher they (and you) go.
Consider how leading in each area of compliance can affect your business.
Human Resources Compliance
With more options than ever before, the world’s top talent is more conscious about
the workplace environment and executive leadership when considering where they want to work and with whom they want to work. Employees are looking for a positive, safe, and fair culture. Enter human resources. While a large part of HR is protecting the interests of the business, there is another side of that coin. Employees want to be confident that their place of work (and the company leadership) will treat them fairly.
Partnering with an HR compliance company is one of the first steps you can take toward creating a culture not only that you are proud of but also that people can thrive in. Numerous studies have shown that happier employees are more productive employees. Productive, talented people are what help grow your business. Not only is HR compliance worth the investment because it is the law, but it is another opportunity for you to lead your company to higher profits.
Safety Compliance
OSHA safety is one of the most important areas of compliance; it deals with honest life or death situations. OSHA exists because businesses in the past have disregarded the responsibility to provide a safe environment for their employees. Since an investment in safety is not always seen as an investment in something that will yield a positive ROI, the money is not spent.
However, a shop known for accidents and injuries not only lowers morale but also turns away prospective job candidates (not to mention current employees) and even customers. It is more costly to not be able to provide a service due to a lack of staff than it is to implement a safety program that ensures your employees are safe and secure while they work.
Installing an OSHA Safety compliance program means that your employees go home in the same condition as they arrive. As a leader and employer, the responsibility to make sure that those
working for you are not harmed while doing their work is paramount.
Consumer Protections and Cybersecurity Compliance
Have you ever been suspicious of a salesperson? Ever had the feeling that you were getting taken advantage of by an employee working off commission? That is because, after a long history of snake oil salesmen, quack doctors, and unethical business practices, consumers have learned that they need to protect themselves from the swindlers of the world.
We are all consumers, but, as a business owner, it is easy to focus on making the most profit from every transaction by whatever means possible. It is for this reason that consumer protections laws exist. They are designed to ensure that companies conduct business in an ethical and legal manner and protect customers’ information that is collected during business transactions.
By being a leader in consumer protections compliance, you are not only avoiding potential harm in the form of fines and lawsuits but also are protecting the rights and data of real people who live in your community. A reputation of trust and care is much more profitable than being known for gouging and being flippant with the sensitive information of those who support your business.
No, compliance is not the word we typically focus on when we think about leadership; however, leading with compliance and integrity is foundational to the kind of business you create and the rate of success you achieve.
For more information on how Ethos Group can help your dealership develop more leaders in your F&I office, sales management tower, and your sales floor in 2025, please contact Drew Spring at dspring@ethosgroup.com or (617) 6949761.
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PlugStar com connects consumers and certified dealers to drive EV sales Designed to enhance the EV shopping experience, the PlugStar program provides dealers with tools, knowledge, and ongoing support through education, certification and resources. Plug In America, the organization behind PlugStar, represents America's deepest pool of EV drivers and is the national leader in EV consumer education.
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Since the launch of the PlugStar program five years ago, Plug In America has trained thousands of dealer and manufacturer sales staff from almost every major automaker Each PlugStar program has recorded improvements of up to 80% in EV salesperson confidence while discussing utility rates and programs, government incentives, the availability and costs of charging at home and on the go. To learn more, visit PlugInAmerica.org/PlugStar.
Patrick Manzi NADA Chief Economist
Sales Finish Year Strong with Highest Monthly SAAR since May 2021
New light-vehicle sales finished the year strong in December, leading to a full-year sales total of 15.85 million units, an increase of 2.2% compared to 2023. The December 2024 SAAR reached 16.8 million units, the highest monthly SAAR since May 2021 with 17.0 million units. New-vehicle sales saw year-overyear gains in the first quarter, followed by declines in the second quarter. New light-vehicle sales accelerated following the election in November 2024 and were strong throughout the remainder of the year. Sales in Q4 of 2024 totaled 4.19 million units, an increase of 7.7% compared to Q4 of 2023. Significant drivers of the sales gain included higher OEM incentives and increased vehicle availability.
All segments of alternative-fuel vehicles posted year-over-year sales and market-share gains. In total, alternative-fuel vehicles represented 20.0% of all new vehicles sold. Conventional hybrids had the largest increase in market share, rising to 10.1% from 7.6% last year. Plug-in hybrids (PHEV) and battery electric vehicles (BEV) also gained market share, but to a lesser extent. PHEV market share rose to 2.0% in 2024 from 1.9% in 2023, and BEV market share rose to 7.8% in 2024 from 7.5% in 2023. BEV sales reached a record 1.24 million units, an increase of 6.8% year over year. The share of BEVs sold by franchised dealers increased as well, with franchised dealers selling nearly 599,000 BEVs—or
48.1% of all BEVs sold. We expect franchised dealers to capture an even larger share of the BEV market in 2025.
New light-vehicle inventory on the ground and in transit in December 2024 totaled 2.79 million units, down 5.9% compared to the beginning of the month and up by 21% year over year. As new light-vehicle inventory increased through 2024, so did OEM incentives. J.D. Power estimates the average incentive spending per unit in December 2024 was $3,442, an increase of $809 year over year. We expect new light-vehicle production to slow somewhat in 2025, which will limit inventory growth and keep inventory levels just below 3 million units for most of the year.
Looking ahead, there will be challenges for the U.S. auto industry. A proposed rollback or elimination of the consumer-facing electric vehicle tax credits will likely slow BEV adoption and limit sales growth. The Fed has signaled it will slow the cadence of cuts to the federal funds rate. Interest rates declined slightly during the final quarter of the year, which contributed to the strong sales pace in Q4. There certainly will be other challenges as well, but overall, our outlook is positive. We expect continued growth in vehicle sales in 2025. Our forecast for new light-vehicle sales in 2025 is 16.2 million units, an increase of roughly 2% compared to 2024.
This Winter Lawmakers Will Hit the Ground Running
By Cody Lusk President & CEO, American International Auto Dealers Association
A new year means fresh starts, clean slates, and boundless possibilities to most Americans. This January, in Washington, D.C., it also ushers in a brand-new presidential administration and Congress, adding another layer to the sense of opportunity ahead.
Of course, all of this newness, including the policies and people pouring into our nation’s capital, will not erase the ongoing issues with which our country and industry have been grappling. Post-inauguration, President Trump and his cabinet will be immediately confronted with a host of policy challenges, both domestic and foreign, none of which are easily solved. The honeymoon period probably will not last much past midnight on Tuesday, the 21st. After that, that inauguration balls will wrap up and the real work of government will begin.
One of the largest question marks hanging over dealers in 2025 has to do with President Trump’s campaign promises around tariffs and autos. He has said repeatedly that he will use tariffs as a lever to secure more favorable deals with America’s global trade partners that he believes have not traded fairly. He also wants to use the tariffs to expand domestic manufacturing. To most observers, it seems likely that China will be his primary target. He has proposed raising the existing Biden tariffs on Chinese goods, including autos, in an effort to stop Chinese manufacturers from making inroads in the U.S. market.
Mexico and Canada, America’s largest trade partners, have been similarly targeted, and in the coming months they will want to work quickly with Jamieson Greer, the presumptive nominee for United States Trade Representative, to land on a workable alternative to new, potentially devastating tariffs. The United States-Mexico-Canada Agreement is set to be reviewed in 2026, and those conversations have already begun. Making sure
customers are at risk. Both Trump and Congressional Republicans have said they do not support federal aid for EVs and plan to reverse emissions rules that require manufacturers to build EVs, opting instead to allow consumer choice to drive production plans.
Trump and his incoming administration have also indicated that they would work to eliminate the EPA’s CARB waiver which allows California to implement its Advanced Clean Cars II program. The program requires new vehicle sales to be 35 percent Zero Emissions Vehicles (ZEVs) for MY2026 and increases to 100 percent ZEVs in MY2035. Eleven states, including Massachusetts, currently follow California’s mandate.
Both
Trump and Congressional Republicans have said they do not support federal aid for EVs and plan to reverse emissions rules
the lines of communication are open will be key to maintaining economic avenues.
Just how Trump’s strategies will play out around the negotiating table remains to be seen. But even a fraction of what Trump has promised could drastically alter the balance of America’s trade relationships and the availability of goods at home and abroad. With vehicle affordability a greater concern than ever before, trade could be THE hot button issue of the new year.
Closer to home, dealers and OEMs are watching the action in Washington, D.C., to understand where our nation’s EV policies are headed. Hundreds of billions of dollars in subsidies and grants provided by taxpayers to EV manufacturers and
In addition to trade and EVs, AIADA and its members are also keeping a close eye on other regulatory agencies, particularly the FTC and its Vehicle Shopping Rule (a.k.a. Combatting Auto Retail Scams Rule) which could earn a new look from the incoming administration. Trump has railed against red tape and bureaucracy, and some dealers are hopeful that a Republican administration could mean less paperwork and hurdles for both themselves and their customers.
For now, AIADA and its members are confident that, as Winter turns to Spring, the optimism we have for 2025 will be rewarded, and the uncertainty we currently face on EVs, trade, and regulations will be replaced with a clear and achievable path forward. On Capitol Hill, and throughout Washington, D.C., AIADA will be working hard to ensure that whatever challenges we face, dealers’ voices will be heard.
By Scott Pearson Chairman, American Truck Dealers
ATD Show 2025 Put the Hammer Down and Powered On
For our franchised truck dealers, their key staff, and vendors who made it to New Orleans for our 2025 convention – I salute you!
One can plan for just about any contingency, but there really is no way to game out the occurrence of an historic, once in 135 years snowstorm, or the inability of a Southern, essentially Caribbean town to not have the resources to address ten inches of snow and packed ice.
Well, truck dealers did what we do best – we pivoted into the face of adversity and powered on, delivering one heck of a show.
I want to say thank you to our ATD leadership, including our board of directors and new president Jacqueline Gelb, as well as the folks at NADA who managed to snatch success out of the jaws of potential disaster. I also want to express my appreciation to all our dealers and vendors who managed to arrive in the Big Easy for our events.
As we look forward to Las Vegas next year, we will bet the odds that lightning will not strike twice on our convention. See you in the Valley of the Sun, February 3-6, 2026.
ATD Chairman Scott Pearson Calls Dealers to Use Their Voice
By Catherine York NADA, Manager, Communications
Following an historic snowstorm, Scott Pearson, ATD Chairman, addressed the medium- and heavy-duty truck dealers in New Orleans at the 2025 ATD Show. He challenged them to follow the same fundamental philosophy he challenges his team at Peterbilt of Atlanta: run to the problem.
“Problems and mistakes don’t define us – how we handle them does. Seize the moment and attack the problem,” Pearson said.
He outlined the “problem” in the truck industry as the stifling effect emissions regulations are having on the market. In 2024, the California mandate required an increasing percentage of zero-emissions vehicles sold in order for dealers to sell ICE trucks. The result – Class 8 truck sales in California were down over 50% this summer.
Ten other states have adopted some portion of the
CARB emissions rules to be enacted in a very short timeline.
“Today, we have the opportunity with the advent of a new Administration, the inauguration just days ago, to act,” Pearson said. “It is time we run toward the problem and tackle it head-on as an entire industry association. ATD has a voice, and it is strong. At the federal level we will continue to use this powerful voice to express our concerns over the emissions regulations that we have constantly identified as too far, too fast.”
Pearson called on the audience of dealers to invite their elected officials to their dealerships, including local government officials, state legislators, Members of Congress, Senators, and regulators.
“Have them meet your employees. Help them understand what your dealership team does every day to support the nation’s supply chain,” said Pearson. “Show them how your employees – their constituents – are going to be impacted by these onerous regulations. Help them understand that today’s diesel engine is not the engine depicted in commercials and cartoons.”
Since Pearson started his career in the industry over four decades ago, the diesel engine has seen tremendous environmental progress. Today’s engine has reduced NOx and particulate matter emissions by 99% from 1970 levels, providing the cleanest, most fuel-efficient engine ever.
“The goal is to bring life to the regulations and legislation these people only experience on paper and in headlines,” said Pearson. “Show them how it works on the ground – or how it doesn’t.”
Pearson shared examples of advocacy at work. Regulators in New Jersey, Oregon, Massachusetts, and New York – all CARB states – have shared recent discussions about slowing down at least parts of their emissions regulations.
“I’m challenging every single one of us to be as involved on the advocacy side as they are on the business side,” Pearson said. “Each day, we work to keep trucks on the road – the same trucks that keep grocery shelves stocked, factories running, homes being built, and our economy running. This is important work, and we know it best.”
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Kenworth Dealer Will Bruser Selected as 2025 Truck Dealer of the Year
Will Bruser, owner and CEO of Truckworx Kenworth in Birmingham, Alabama, was named the 2025 Truck Dealer of the Year at the ATD Show 2025 in New Orleans. The national award, sponsored by American Truck Dealers (ATD), Trucks, Parts, Service, and Procede Software, recognizes commercial-truck dealers for business performance, industry leadership, and service to their community.
“I’d like to thank my parents for teaching me at a very young age that it is always better to serve than receive,” Bruser said in acceptance of the award. “I would like to thank our amazing 600plus employees back home, our wonderful customers, and our OEMs Kenworth, Hino, and Isuzu.”
Bruser began his work at Truckworx in 2004. He was named president in 2013 and bought the business in 2021. Under his leadership, the company has grown to 21 locations and over 600 employees across Alabama, Mississippi, and the Florida panhandle.
“Let’s all not forget that without a truck, America stops,” Bruser said. “In 2025, let’s keep America rolling.”
Bruser believes redefining the Truckworx culture has been pivotal to its success, hinging on its mission statement: Do what’s right for the right reasons all day, every day. Truckworx was recently named North America’s 2024 Dealer of the Year and received the Gold Award for Overall Dealer Excellence by Kenworth Truck Company.
Bruser was chosen from six nominated commercial truck dealers, including:
• Michael Burroughs, Vice President of Burroughs Diesel, Inc., in Laurel, Mississippi;
• Mike Clark, CEO of Dobbs Peterbilt in Memphis, Tennessee;
• Shawn Trimble Craig, CEO and named Dealer Successor of Southwest International Trucks in Dallas, Texas;
• Jeff Speno, President and Dealer Principal of Mission Valley Ford in San Jose, California; and
• Mike Bergey, CEO of Bergey Family Corporation in Souderton, Pennsylvania, who was recognized as the award finalist.
The nominees were selected by state, metro, and national dealer association leaders. A panel of judges from Indiana University’s Kelley School of Business evaluated the nominees and selected the winner.
Bruser succeeds 2024 Truck Dealer of the Year winner Katie Hopkins, president and CEO of Truck Centers, Inc., based in Troy, Illinois. He will have the opportunity to serve as a guest lecturer at the University to share his professional story with students interested in entrepreneurship and will serve on the ATD Board of Line Representatives for a one-year term in a non-voting role.
On January 15, ATD President Jacqueline Gelb issued the following statement in response to CARB’s withdrawal of its Ad-
vanced Clean Fleets Waiver request to EPA:
“ATD and America’s heavy-duty truck dealers are pleased and relieved that California has abandoned its completely unrealistic and unworkable Advanced Clean Fleets regulation, which would have forced trucking fleets to adopt zero-emission trucks at levels far above anything that is practical or sensible in today’s market and given today’s significant technological limitations.
“California’s mad dash to force the commercial vehicle industry into technologies that are nowhere near ready for full-scale adoption has already devastated the market, with Class 8 truck registrations in the state down 50 percent year-over-year due in combination to CARB’s Advanced Clean Truck (ACT) zero-emissions sales mandate, and Omnibus Low NOx regulations (ACT II rule).
“The commercial truck industry is very diverse in its operations and models, reflecting the important work that trucks do every day to support our country. Truck dealers serve a vital role as advocates between vehicle manufacturers and motor carriers, but California’s overly aggressive regulatory regime has prevented dealers from being able to stock or sell nearly enough newer, cleaner diesel trucks to our willing customers.
“ATD has engaged with the Trump transition team to express support for its intention to revoke the remaining California ACT and Omnibus NOx CARB waivers and will continue to press for a sensible and achievable emissions regulations that reflect the market realities of the industry.”
Sales of Electric Heavy-Duty Trucks Are Hitting a Regulatory Wall
Commercial prospects for the vehicles face shifting and contradictory mandates, leaving dealers in limbo
By Paul Berger, The Wall Street Journal
Heavy-duty truck manufacturers and dealers are caught in a swirl of shifting and conflicting rules over zero-emissions big rigs as the changing regulatory landscape undercuts the commercial prospects of the vehicles.
Trucking industry executives say the road to electric trucks has become particularly cloudy in California, which has led the nation in moves away from conventional fuels and served as a model for other states looking at tightening truck rules. California has rolled back some of its rules because of the new administration in Washington even as some of the state’s zero-emissions demands remain in place.
The changes have left truck manufacturers and dealers in a limbo as they contend with a requirement to sell zero-emissions electric trucks to fleets that have little regulatory incentive to buy the new rigs. Those initiatives suffered a setback this month when the California Air Resources Board, citing anticipated opposition from the Trump administration, abandoned a request to the Environmental Protection Agency for a waiver that would have allowed California to force trucking companies to buy battery-electric vehicles.
The mandate was part of the state’s multipronged effort to create a commercial market for zero-emissions trucks, a strategy that has effectively collapsed with the withdrawal of one leg of the regulatory plan.
California regulators say they are “re-evaluating next steps,” but are still on track to phase out most diesel-powered heavy-duty trucks from the state’s ports by 2035 and from other trucking operations by 2045 using a range of other regulations and incentives.
Trucking industry executives say the road to electric trucks has become particularly cloudy in California, which has led the nation in moves away from conventional fuels and served as a model for other states looking at tightening truck rules.
Trucking industry officials broadly welcomed California’s move because of battery-electric trucks’ limited driving range compared with diesel and because of the scarcity of electric-charging infrastructure across the state.
But they said the decision also is complicating companies’ fleet plans because California still has in place a rule that forces manufacturers to sell a growing number of zero-emissions trucks each year.
That means manufacturers such as Daimler Truck North America, one of the country’s largest truck-makers, is requiring that dealers sell a certain number of battery-electric vehicles so that manufacturers comply with the law, even if demand for the trucks is tepid.
“Customers aren’t going to lean into something they don’t have the ability to charge,” said John O’Leary, chief executive of Daimler Truck North America. But “we have to convince someone to buy electric trucks that they may not otherwise want.”
Dealers say each manufacturer has different metrics for the number of battery-electric trucks that must be sold. If the dealers don’t sell the required number of EVs, manufacturers won’t send new diesel big rigs to their lots, which dealers say could lead to a shortage of new diesel trucks.
Doug Howard, president of California Truck Centers, a Fresno-based group of eight truck dealerships, said he has adequate access to diesel-fueled trucks for now because he and Daimler Truck North America have built up credits with state regulators through sales of vehicles such as battery-electric buses and some diesel models with cleaner engines. “But unless the rules change, we’re going to run out of access to diesel engines,” he said.
Industry leaders say they are increasingly confident the Trump
administration will buy them more time in the transition to zero-emissions vehicles by further loosening current and planned state and federal emissions rules.
“The [charging] infrastructure isn’t in place and likely won’t be in place to meet those aggressive timelines,” said Jim Mullen, executive director of the Clean Freight Coalition, a lobby group that represents carriers and truck dealers. “I don’t think anybody believes that the timelines are achievable.”
Most battery-electric trucks have a driving range of about 200 miles. They are mostly being used for short-haul operations shuttling freight between ports and rail yards, warehouses and distribution centers, and then charged overnight.
Truck dealers say commercial pressures are being exacerbated by a California mandate to cut nitrogen-oxide emissions. That requires a standard for engines in 2024 vehicles and beyond that some manufacturers are struggling to attain.
“Something has to give, or a lot of dealers and customers will be suffering here,” said Kim Mesfin, president of Fresno-based Affinity Truck Center.
ATA Chairman Dellinger Presses Truck Excise Tax Repeal Transport Topics
On January 22, American Trucking Associations Chairman Dennis Dellinger called on a House panel to repeal a World War I-era excise tax on new trucks.
A repeal of the long-standing 12% tax on commercial vehicles would facilitate upgrades to fleets and enhance safety and efficiency industrywide, the chairman said during a Highways and Transit Subcommittee hearing.
“Initially implemented as a 3% tax to offset the cost of American participation in World War I, this tax has grown to be one of the highest excise taxes on any good in the United States,” Dellinger, CEO of Claremont, North Carolina-based Cargo Transporters, told lawmakers as he further emphasized its repeal would reduce the cost of cleaner and safer new model trucks.
“As it adds over $20,000 to the cost of a new $180,000 truck and $6,000 to the cost of a new $50,000 trailer,” the ATA chairman added, “this onerous charge creates a disincentive to putting new equipment that is cleaner and safer than ever before on our nation’s highways.”
During several recent White House administrations, prominent freight stakeholders joined ATA in urging Congress to repeal the tax. At the hearing, the ATA chairman also pressed the panel on the need to expand nationwide access to truck parking. Increasing parking availability is a priority for the trucking industry.
“The lack of available truck parking significantly impacts not only the health and well-being of truck drivers but also driver utilization and efficiency. On average, truck drivers lose approximately $5,500 annually in direct compensation — equivalent to a 12% reduction in yearly pay — due to time spent searching for
parking,” Dellinger continued.
Speaking with Transport Topics prior to the hearing, the ATA chairman stressed the importance of ensuring the nation’s transportation system continues to offer a safe and efficient environment for the freight industry.
“No. 1 is, as I mentioned earlier, fixing the roads that we currently have,” Dellinger said. “The highways and bridges are our workplace … it is a working environment. And so, anything that we do that benefits the consumer, that benefits the motoring public and our drivers from a safety standpoint is very important.”
Recent bipartisan legislation meant to address the industry’s concerns specific to the excise tax and access to truck parking have not been enacted. Rep. Mike Bost (R-Illinois) is among the transportation policymakers focused on advancing bipartisan truck parking legislation. The congressman said during the hearing: “Many states have indicated they don’t have enough truck parking capacity, which we know affects highway safety, supply chain, efficiency, driver recruitment and retention.”
Jim Tymon, representing state transportation agencies as the executive director of the American Association of State Highway and Transportation Officials, reminded lawmakers of economic benefits associated with a well-functioning network of highways.
“American quality of life and economic mobility depend in large part on the quality and vibrancy of our transportation infrastructure to connect people as well as goods to their destinations safely. A strong transportation system enables American businesses to produce and distribute American agriculture, commodities, materials and products more efficiently and competitively within the United States and to export to the world,” Tymon said.
“In a global economy,” he added, “sound and sustained investment in our nation’s transportation infrastructure is critical to bolstering America’s role in the world economically and politically.”
The subcommittee hearing, titled “America Builds: Highways to Move People and Freight”, kicked off the Republican-led chamber’s consideration of big-picture updates to the nation’s highways.
Policymakers have less than two years to reauthorize federal surface transportation programs. Arriving at a long-term funding system designed for the federal highway networks is a priority for Congress.
The federal Highway Trust Fund uses revenue from the fuel tax to assist states with construction and maintenance projects. It is backed by revenue from the federal 18.4 cents-per-gallon tax on gas and 24.4 cents-per-gallon tax on diesel.
“Highway funding relies on a ‘user-pays’ principle,” explained Highways and Transit Subcommittee Chairman David Rouzer (R-North Carolina). “It’s pretty simple: You purchase fuel to fill up your vehicle to use the roads, and our fuel taxes go into the Highway Trust Fund. However, electric vehicles, which are often heavier than their conventional counterparts because of their batteries, do not pay into the Highway Trust Fund. It is wholly unfair that an entire segment of users doesn’t contribute to the roads and
bridges they use. This won’t address the greater solvency issue, but we must rectify this, so all users are treated fairly and contribute to the systems on which they rely.”
Del. Eleanor Holmes Norton (D-D.C.), the subcommittee’s ranking member, proposed the panel draft a bipartisan highway policy legislation. Doing so, she argued, would help reflect priorities from Congress as well as state officials.
“We should be working together, across the aisle and with the incoming administration, to celebrate the economic and safety benefits of transportation projects,” Norton said. “To ensure these benefits continue to flow to our constituents, we need to engage local partners in the next reauthorization.”
ATD Dealership Workforce Study Now Open
ATD knows that dealers today face numerous challenges, including high employee turnover, difficulties in recruitment, and the constant pressure to remain competitive in a rapidly evolving market. These demands deplete valuable resources and significantly impact overall dealership performance and profitability. Understanding workforce trends and leveraging data-driven insights are crucial steps in effectively addressing these issues.
The ATD Dealership Workforce Study is a resource to assist dealers in addressing these challenges and understanding truck dealerships with real data from ATD members. It is the only authoritative and comprehensive examination of truck dealership workforce trends. This study provides the latest industry data on employee compensation, benefits, turnover, retention, demographics, hiring trends, hours of operation, and more. The data is published in annual reports for members only. The reporting shows national and regional data as well as sales volume ranges from low and high-volume stores.
Participation is key to the success of the study and the value of the data. ATD member dealers can enroll at https://www.atdworkforcestudy.com/.
There is no cost to participate.
What do you get for participating in the study?
• National & Regional Trends Report: Overview of compensation, benefits, turnover, retention, hiring, and demographics trends.
• New! Refreshed NADA Online Database Search Tool: Your data at your fingertips. View your submitted data and conduct comparison analysis using custom filters online and on demand. Exclusive one-year access for study participants only.
Once you enroll you will receive an email with instructions to complete an online benefits questionnaire and complete the payroll file. All responses and data are confidential.
IMPORTANT!! You will need the NADA Member ID number for your single store or Dealer Group to enroll. If you do not have this NADA Member ID number, please contact NADA Customer Service at (800) 557-6232.
The enrollment for the 2025 Study closes promptly on March 14, 2025.
NADA Show 2025 Success in Face of Historic Storm
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Despite the effects of an historic snow and ice storm that shut down New Orleans days prior to the start of NADA Show 2025 and made incoming travel for attendees rather difficult, NADA leadership made the necessary schedule and site adjustments to put on a fantastic event.
Having been there in 2017 for NADA’s 100th anniversary – but missing 2021 because of Covid disruptions – everyone leading up to this year’s event was looking forward to a return visit to the Crescent City. Dealers, vendors, and staff all displayed the resiliency and determination that is the foundation of our industry in persevering through the challenges that arose. Making lemonade out of lemons was never truer in the Big Easy than this year.
I also want to congratulate our Massachusetts TIME Dealer of the Year, George Haddad of the Haddad Auto Group in Pittsfield, who was named one of five regional finalists for the national award, competing against 48 other nominees from around the country. George was our fourth finalist out of the past five years of the competition.
Finally, as we returned from the Show, we all received word that the U.S. Fifth Circuit Court of Appeals vacated the Federal Trade Commission’s Vehicle Shopping Rule – yet another onerous Biden administration regulation shot down by the courts. Beating the FTC demonstrated the power and commitment of NADA staff and the focus of the NADA board of directors in righting this wrong. The court concluded, as we maintained all along, that the FTC did not even follow its own rules in promulgating the regulation. Truly a momentous victory!
NADA
Chairman Gary Gilchrist – January 2025 Letter to Directors and ATAEs
Fellow Dealers and ATAEs,
Like all of you, along with everyone at NADA, I am deeply frustrated by the recent news from Volkswagen/Scout and
Honda/Sony that they intend to retail their new vehicles directly to consumers.
NADA has spent the better part of two years working diligently to persuade Volkswagen and Honda against making the outrageous and misguided determination that attempting to sell their vehicles directly will be beneficial to them or their customers.
Through countless outreach attempts, including multiple letters and emails, invitations to engage in discussion, and even a trip to Japan, NADA again and again presented to these OEMs the central fact of the issue: The franchise system works best for customers and automakers alike.
This reality 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 franchised dealers is more cost-effective than a direct sales channel, and provides tremendous additional value to automakers and consumers alike.
We also made it clear – and will continue to do so – that any decision by any automaker to try to compete with or cut out its dealer partners is unacceptable, plainly illegal and will be challenged in statehouses and courthouses across the country – with NADA’s full support.
Franchised dealers are better than anyone at meeting their customers where their customers want to be met in the sales and service process, whether that’s the showroom, 100% online, or somewhere in the middle – which is exactly where most customers say they want to be. Dealers are fully committed to evolving and improving the franchise model and embracing new technologies and tools to help further improve the customer experience – which is already one of the best in the world based on customer satisfaction indexes.
The smart manufacturers, including the vast majority of legacy OEMs, have recognized the invaluable role their dealer networks play in their success. What’s more, as the newer EV-only companies continue to grow, they are invariably finding that they have no choice but to replicate the franchised dealer model to sell and service EVs at scale – and all are operationally moving in the direction of having dealerships in every way but the name.
NADA has been working with ATAE and the state and metro dealer associations to determine the best legal and legislative paths forward to protect the franchise system, enforce the law, and stand behind Volkswagen, Audi, Porsche, Honda, and Acura dealers. And we will continue to do so.
At the same time, NADA will continue to press leaders of these brands to meet with us to discuss how they can use the
proven success of the dealer franchise system to their benefit and avoid unnecessary and protracted state-by-state legal challenges.
But regardless of what direction this takes, you have my assurance that the protection and the preservation of the franchise system will always be NADA’s most pressing priority, no matter what.
Many thanks,
Gary Gilchrist
2024 NADA Chairman On to Las Vegas for 2026!
NADA, TADA Win Court Challenge to FTC Vehicle Shopping Rule; Rule is Vacated
On January 27, the U.S. Circuit Court of Appeals for the Fifth Circuit, in a 2-1 vote, granted a petition filed by the National Automobile Dealers Association and the Texas Automobile Dealers Association to vacate the Federal Trade Commission’s Vehicle Shopping Rule – also known as the Combating Auto Retail Scams (“CARS”) Rule – for violating the FTC’s own procedural requirements for issuing trade regulation rules.
More specifically, the court held that the FTC skipped an essential step to inform the rulemaking process requiring it to begin with an Advanced Notice of Proposed Rulemaking. As a consequence, the FTC Vehicle Shopping Rule has no force or effect.
NADA President and CEO Mike Stanton issued the following statement in response to the court’s decision: “Monday’s decision by the 5th Circuit Court of Appeals on NADA’s and TADA’s legal challenge is a victory for the rule of law and a great outcome for consumers. As we have been saying since this rushed, poorly researched, and unnecessary rule was announced, the FTC’s Vehicle Shopping Rule would have added massive amounts of time, complexity, paperwork and cost to the car-buying and car-shopping experience for virtually every customer. That truly would have been a nightmare for consumers and dealers alike. Thanks to the success of this legal challenge, dealers can get back to what they do best, which is creating the best-possible customer experience and reducing transaction times wherever possible.”
NADA Show Days One and Two –Resilience Takes Center Stage in New Orleans After Opening Night Party
By Sheryll Poe, NADA Consultant
Friday, January 24 — Despite an unprecedented 10 inches of snow (thanks, Enzo), the Automotive Industry Event of the Year rolled into New Orleans on Friday, January 24, with NADA Show 2025 at the Ernest N. Morial Convention Center and the concurrent American Truck Dealers (ATD) Show 2025 at the Hilton Riverside.
The night before, attendees were able to enjoy an unfor-
gettable NADA Show Welcome Reception: NADA Fest, also held at the convention center. Part jazz fest, part bayou bash, NADA Fest offered plenty of opportunities for networking with fellow dealers, OEMs, exhibitors, and industry affiliates. Grammy Award winning jazz artist Trombone Shorty headlined the event, and plenty of only-in-NOLA flavors were on hand, from po’boys and jambalaya to bourbon and beignets (but no sno-balls!).
The Auto Industry’s Biggest Expo
Opens
The excitement was palpable this morning at the annual “seatbelt unbuckling” ceremony, which marks the official opening of the NADA Show Expo. Attendees queued up to meet representatives from more than 500 companies—from startups to Fortune 500 companies—offering products, solutions, and services to help dealerships stay ahead of the competition.
NADA 2024 Chairman Gary Gilchrist’s remarks ahead of the seatbelt unbuckling emphasized the unofficial theme of this year’s Show—”resiliency.” Franchise auto dealers “have a proven track record of adaptability and resilience,” Gilchrist said as he recapped his tenure as NADA chairman. “Thank you for the opportunity of a lifetime and an unforgettable year.”
Executive coach and bestselling author Ryan Leak also spoke about resiliency during his inspiring Main Stage session, highlighting how to “level up as a leader” and build flexible, high-performing teams at the dealership. So many “of us have been through a lot just to be in this room, not just this week but in life,” Leak said.
First-in-Class Education Sessions
Much of Thursday’s programming was rescheduled to day two, making Friday a busy but productive day of franchise meetings, workshops, and other educational sessions.
There were more than 60-plus workshops this year, as well as innovative Ask the Expert seminars, mini sessions in the Dealer Learning Lab, and an EV Power Pit on the Expo Floor.
For the first time, the popular NADA Live Stage was in the center of all the action on the Expo floor. Throughout the day, attendees at Live Stage were treated to a rotating roster of speakers and panelists. Some of the more than a dozen short, engaging presentations on Friday included a 2025 economic forecast from NADA and COX Automotive; an overview from TVB on Capturing the 2025 Auto Customer: Streaming TV in a Linear World; a conversation with 2024 NADA TIME Dealer of the Year Rita Case; the roll-out of Dealer Driven, the new NADA podcast; and the ever-popular Third Annual NADA Exhibitor Pitch Competition.
NADA Show Day Three –Charity and Comedy in the Big Easy
By Sheryll Poe, NADA Consultant
Saturday, January 25 — One of New Orleans’ trademark mottos is “laissez les bons temps rouler”—or “let the good
times roll”—and attendees definitely kept the good times rolling on day three of NADA Show 2025. Dealers and managers, OEM execs, allied industry and international guests participated in workshops and other educational sessions, as well as one-on-one exhibitor meetings and many other events designed to help dealerships run as effectively and efficiently as possible.
But first, coffee and jokes.
Starting the Day with Some Laughs
Comedian, actor, and impressionist Frank Caliendo got the day started with a lively opening session on Main Stage. Caliendo had the auditorium roaring with laughter with his uncanny comedic impersonations of political and cultural figures, including Donald Trump, Joe Biden, Charles Barkley, and Morgan Freeman.
Raymond Farabaugh, president of D-Patrick Inc. in Evansville, Indiana, was named the 2025 TIME Dealer of the Year. The award, sponsored by Ally Financial, celebrates franchised new-car dealers for exceptional business performance and outstanding community service.
Farabaugh’s auto group invests hundreds of thousands of dollars annually in direct contributions and sponsorships, supporting an array of local organizations such as the Boone County Cancer Society, Boys & Girls Club of Evansville, Evansville Philharmonic Orchestra, Ronald McDonald House Charities of Ohio Valley, Special Olympics Indiana, Walk to End Alzheimer’s Southwest Indiana, and many more.
The TIME Dealer of the Year winner and finalists are chosen by a panel from the Tauber Institute for Global Operations at the University of Michigan. The panel selects finalists from each of the four NADA regions, and, ultimately, a national winner from those finalists. In addition to Farabaugh, the 2025 TIME Dealer of the Year finalists include:
• Sean P. Baxter, Kayser Ford Inc., Madison, Wisconsin
• George Haddad, Haddad Toyota, Pittsfield, Massachusetts
• Con Paulos, Con Paulos Chevrolet, Jerome, Idaho
• Cathy Stender, Woody Anderson Ford, Huntsville, Alabama
Incoming NADA 2025 Chairman Tom Castriota gave his inaugural address, promising to draw on lessons learned from 35 years in military service. “My decades in the military taught me the simplest definition of service is being unselfish,” he said.
Castriota, owner of Castriota Chevrolet, Inc., in Hudson, Florida, made a point of not only honoring military veterans in the audience, but also making everyone in the audience part of the “NADA mission” by handing out custom-made Challenge Coins that highlighted the strength of, and dedication to,the franchise dealer network.
“You are part of that NADA mission, and I promise you that NADA will be accountable to you, and I’m asking fellow dealers to be accountable to NADA and each other,”
Castriota said. “A strong franchise system is key to a strong America.”
Castriota also emphasized the many positive impacts of dealers on their communities, including donating some $500 million to local charities each year. “Large companies can write a check, but none can do it like the thousands of local dealers who live in, work for, and care about their communities,” Castriota said.
Philanthropy with Purpose
NADA announced the donation of a brand-new Ram 3500 to Second Harvest Food Bank of Greater New Orleans and Acadiana. The heavy-duty pickup truck, purchased from Hebert’s Town & Country Chrysler Dodge Jeep Ram in Shreveport, Louisiana, will be used to support the food bank’s Makin’ Groceries Mobile Market, a traveling grocery store selling fresh produce, proteins, dairy, and dry goods at affordable prices in neighborhoods identified as food deserts.
There was plenty more philanthropy. Assurant Dealer Services continued its annual tradition of donating to the NADA Foundation’s Workforce Initiative, presenting a check for $30,000 to NADA Foundation Chairwoman Annette Sykora on the Live Stage.
On Live Stage, Marty Schwartz, president of Vehicles for Change, which helps low-income individuals obtain a vehicle, noted how 8,000 vehicles so far have been donated, refurbished, and awarded to individuals and families since the program began in 1999. Thanks to a partnership with NADA, Vehicles for Change is now connected with local dealers who wish to donate vehicles, including Hebert’s Town & Country Chrysler Dodge Jeep Ram, which is also awarding a vehicle to a deserving family in Shreveport, Louisiana, next month.
Schwartz was joined by Adrianna Boyer, who was one of four families to receive vehicles at NADA headquarters last March. Boyer expressed her appreciation for her Kia Rio, which was donated by Carter Myers Automotive Group, Charlottesville, Virginia. In addition to sourcing the donated vehicles, the NADA Foundation donated $5,000 per vehicle to cover associated costs, including refurbishing and making necessary repairs.
Then there was the annual, and always crowd-pleasing, NADA Foundation Canine Companions charity auction, which showcased adorable assistance dogs at the OpenLane booth on the Expo Floor. Bids were fast and furious for a chance to take home a once-in-a-lifetime Masters Golf Tournament Experience. In the end, this year’s auction raised an impressive $88,335 for Canine Companions for Independence, which provides highly trained assistance dogs for children, adults and veterans with disabilities.
Education for All
Day three also was full of collaboration, learning, and skill building with more workshops, exchange sessions,
n A d A u pdate MSADA
Dealer Learning Lab mini-sessions, and dealer franchise meetings throughout the day.
At Saturday’s Spotlight Session, Michael Dunne, CEO of Dunne Insights, explored how China’s meteoric rise as an automotive manufacturing powerhouse has reshaped the global industry.
Education on the Expo floor continued with Ask the Expert and EV Power Pit sessions, as well as numerous Live Stage presentations. Live Stage topics included the new administration and its impact on dealers, blending artificial intelligence and personnel, the benefits of the NADAVault secured-data platform, and lessons in longevity from NADA Century Award winner, Kings Ford, which has been selling cars in Ohio since 1915.
NADA Show Day Four Recap–Au Revoir, New Orleans
By Sheryll Poe, NADA Consultant
Sunday, January 26 — In New Orleans, a lagniappe is a small bonus or gift for a customer. Day four of NADA Show was all about giving that little something extra to all the dealers and managers, OEM execs, allied industry and international attendees who made it to the Crescent City for this year’s big event.
While NADA bid a fond “a bientot” or “see you soon” to New Orleans—that is, until the Show returns to the Big Easy in 2029—here is a look at all the action today.
Lessons Learned on Main Stage
Not too many leaders can say they have led the Team USA basketball squad to even one Olympic gold medal, but Coach K (Mike Krzyzewski) can boast three Olympic gold-medal teams. The former head of men’s basketball at Duke University—where he led his players to five national titles—Coach K is a master motivator of not only teams, but also individuals and organizations.
On Sunday, Coach K took to Main Stage to share key coaching tips and inspire dealers to spur employees on to succeed beyond even their own expectations.
“Your people are the single biggest resource,” Coach K said. As for putting together a team, Coach K stressed how dealers need to ensure staff set aside their egos and buy into the larger vision. Even if they are LeBron James and Kobe Bryant, he joked. Employees “have to feel what they’re doing,” Coach K said. “If they only come to work for you…it’s not going to be optimal. They have to feel it in their heart.”
Product Demos, Education, Networking
Attendees continued to enjoy product demos and one-onone connections with exhibitors, as well as OEM meetings and assorted networking events. There also was a full roster of educational programming: workshops, Exchange sessions, Ask the Expert mini-sessions, the Dealer Learning Lab, the EV Power Pit, and a Super Session focused on fixed ops by five highly-qualified NADA Academy instructors.
American Truck Dealers (ATD) President Jacqueline Gelb and ATD Chairman Scott Pearson were on Live Stage to discuss the state of the commercial-truck industry. Upcoming ATD priorities: informing the new Congress and administration about truck-dealer issues, battling onerous environmental and emissions regulations, and supporting legislation benefiting truck dealers and their customers, such as bills to repeal the Federal Excise Tax on most new heavy-duty trucks.
The final Live Stage presentation put the spotlight on upcoming NADA and ATD events, including the New York Automotive Forum in April and ATD Fly-In in June. Plus, there was a preview of what to expect at NADA Show 2026 and ATD Show 2026, including rumors of an opening welcome reception at The Formula 1 Paddock Club in Las Vegas.
That’s a Wrap!
Just because NADA Show 2025 is over, does not mean it ends. Many of your favorite sessions can be accessed on-demand. Plus, there is always next year to look forward to as NADA Show 2026 returns to Vegas. See you there!
NADA CEO: Emissions Regulations, Direct Sales, CARS Rule Among Top 2025 Issues
By Lindsay VanHulle, Automotive News
The National Automobile Dealers Association will have its eye on several key issues in 2025.
The new Trump administration brings optimism for dealers, NADA CEO Mike Stanton said. Donald Trump’s return to the White House also creates the potential for significant change in the industry — on tariffs, electric vehicle tax credits and emissions rules.
One issue that Stanton said will be top of mind: rules requiring 35 percent of auto sales in California and several other states to be zero-emission vehicles starting with the 2026 model year.
“We’ve got a lot of priorities,” he said. “This is right around the corner.”
Stanton spoke with Staff Reporter Lindsay VanHulle at the Detroit Auto Show in January, before the NADA Show. Here are edited excerpts.
Your concerns about California’s emissions regulations are not just that they’re ahead of the market, but that they could affect automakers’ allocation strategies?
Which would be disastrous for the customer. [A] customer could face a situation where they can’t get the car that they want in the state that they live in because of the mandates and the fines associated with the mandates. EV doesn’t work for them. They want an ICE vehicle. And the manufacturers are having to basically adjust what they sell — the denominator, the ICE vehicles.
What is the latest on challenging direct sales by Scout Motors and Sony Honda Mobility?
These are legacy manufacturers in VW and Honda that have taken the misguided step of competing directly with
their dealer partners — dealers that have put them on the map here in the United States, dealers that are looking for new product. And for the investments that the dealers have made, the customer relationships they’ve built, this is a slap in the face. And I’m not going to reveal legal strategy, but I have the commitment of the board at NADA to support the states that will challenge this.
What do you think may happen to the Federal Trade Commission’s CARS Rule?
Right now, it’s in the 5th Circuit. I think we’ve left everything on the field in terms of what we should do to knock this horrible rule out. So that’s on the one hand. On the other hand, we are working every angle we can on Capitol Hill. We have engaged with the FTC Republican commissioners.
with Amazon directly, because our job is to make sure that the dealers are aware of the agreements they’re signing. I’m not suggesting there’s anything wrong with this, but we will play that role of taking a look at the agreement.
What’s your outlook for the market in 2025?
We think it’s going to be better, in terms of numbers. We think the used market is going to be strong. We don’t share the specifics, but 20 Group profitability has returned to where it was pre-pandemic. When supply was tight, dealers had a very strong couple of years. So we see it as a return to normal, which is good, but it doesn’t feel quite as good.
What impact do you think tariffs would have on the industry?
This is my personal opinion. I don’t have an official NADA opinion. But I believe we need to continue to keep the Chinese automakers out of our market. I think that’s best for our industry, our ecosystem, our country, consumers, data privacy. I don’t want to comment on what the Trump administration may or may not do. That would be speculation. But we want to make sure that our manufacturers, the ones that we represent, continue to be in a competitive position.
Amazon-Hyundai is not direct sales. Amazon is another vendor to help facilitate sales between the dealer and the customer.
We have engaged with former FTC officials. If we don’t get a favorable ruling, we’re going to keep fighting, because this is horrible for consumers, horrible for dealers.
What are you hearing from Hyundai dealers about the Amazon partnership?
Amazon-Hyundai is not direct sales. Amazon is another vendor to help facilitate sales between the dealer and the customer. NADA has played an advisory role from a legal perspective with the Hyundai dealer council. The Hyundai council was negotiating an agreement directly with Amazon, and NADA was supporting the council in those negotiations. We are going to review it, and we will express concerns that we have with the dealer council. We will likely express those
What would be the impact of eliminating the federal $7,500 EV tax credit?
In December, we saw a big, big push, and I think some consumers were concerned that that tax credit’s going to go away. You take the $7,500 tax credit away, and you’re going to see sales take a nosedive. Our chief economist tells me we have $7 billion of EV inventory sitting on dealer lots as of right now. That’s a lot of EVs. And as you know, we buy them. We buy them to sell them. And the longer they sit on our lots, the more we’re going to pay in terms of floorplan interest. What we’re hearing on the Hill is that these tax credits are on the chopping block. We’d like to see a reasonable ramp-down in terms of, let the manufacturers adjust, let dealers work out of this inventory that we have, knowing that there’s an end date. But to just pull the plug would leave dealers in a very, very tough situation.
