July 2024 Mass. Auto Dealer

Cybersecurity for Dealerships

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

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Robert O’Koniewski, Esq. executive Vice President rokoniewski@msada.org

Jean Fabrizio Director of Administration jfabrizio@msada.org

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Robert O’Koniewski, Esq. executive editor MSADA o ne McKinley Square Sixth f loor Boston, MA 02109

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Covert Dangers Demand Constant Vigilance

By Jeb Balise, MSADA President

As business owners, today our most perilous threats are not lurking in front of us but are the unseen and unknown, able to strike at any hour of the day from beyond the four corners of our stores. These cyber threats can destroy a business without a moment’s warning.

While CDK dealers worked their way through the end of June into July with systems severely impacted by the cyberattack initiated by BlackSuit on June 19, they faced warnings from cyber crime experts and the IRS regarding phishing schemes attempting to penetrate dealership systems. And then a full month later, on the morning of July 19, we all woke up to another system shutdown, this one not criminally motivated but a seemingly innocent faulty software update by CrowdStrike that affected Microsoft system operations, amongst others, including services at our Registry of Motor Vehicles. The CrowdStrike outage also was followed by bad actors’ phishing attacks on businesses, including auto dealerships

dealerships are spending hundreds of thousands of dollars each year to avoid falling prey to the constant threats of cyber-crime and government regulators.

MSADA has long warned us of these silent, invisible, business-killing threats. Over the years our Association has held live seminars and virtual webinars and published a constant stream of bulletins and magazine articles to provide us dealers with the necessary knowledge to protect our businesses and remain compliant with an ever-growing volume of federal and state laws and regulations. These efforts do not come without cost, as dealerships are spending hundreds of thousands of dollars each year to avoid falling prey to the constant threats of cyber-crime and government regulators.

We work with a number of experts in this field to assist our members. Last month’s and our July magazine, including our cover story, provide you with a comprehensive menu of whom you can talk to and about what. Also this month, OCD Tech, an associate member, put forth a webinar to help dealers in their post-CDK shutdown efforts. If you missed it, contact us for a recording.

Moving forward, do not hesitate to reach out to us for assistance. It is one thing to make sure you have locks on your doors, keys to your inventory secured, and adequate lighting for your lot. It is a different matter entirely as these dark threats can stealthily strike out at your dealership operations at any hour of the day without warning through the indispensable computers on your employees’ desks and in their hands. Unfortunately, constant vigilance now must take prominence atop your to-do list.

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

robert Boch, expressway toyota

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

American Fidelity Assurance Co.

Kathleen Weisenbach (402) 523-5945

America’s Auto Auction Boston

Chris Colocousis (774) 218-8930

ArentFox LLP

Paul Marshall Harris (617) 973-6179

Sarah Decatur Judge (617) 973-6184

Armatus Dealer Uplift

Joe Jankowski (410) 391-5701

Assurant Dealer Services

Sean Skinner (603) 660-3647

Auto Auction of New England

Steven DeLuca (603) 437-5700

Bank of America Merrill Lynch

Dan Duda and Nancy Price (781) 534-8543

Bellavia Blatt

Leonard Bellavia (516) 873-3000

Broadway Equipment Company

Fred Bauer (860) 798-5869

Brown & Brown Dealer Services

Jason Bayko (508) 624-4344

CDK Global

Rob Steele (508) 564-1346

Clifton Larson Allen

Rick Parmelee (860) 982-9307

Cooperative Systems

Scott Spatz (860) 250-4965

Cox Automotive

Polly Penna (303) 981-1298

Creative Resources Group

Charlie Rasak (508) 726-7544

CVR

John Alviggi (267) 419-3261

Dave Cantin Group

Woody Woodward (401) 465-7000

Dealer 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

Eastern Bank

David Sawyer (617) 620-3484

EasyCare New England

Greg Gomer (617) 967-0303

Ethos Group, Inc.

Drew Spring (617) 694-9761

F&I Direct

Sean Wiita (508) 414-0706

Michelle Salas (508) 599-0081

Federated Insurance

Kevin Sundberg (559) 547-9694

Fisher Phillips LLP

Joe Ambash (617) 532-9320

Jeff Fritz (617) 532-9325

Josh Nadreau (617) 532-9323

GW Marketing Services

Gordon Wisbach (857) 404-0226

Hilb Group

James Pietro (508) 791-5566

Huntington National Bank

Mark Flibotte (781) 724-3749

iHeart Media

Paul Kelley (757) 328-1431

ION Bank

Timothy Rourke (203) 439-9400

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

Management Developers, Inc.

Dale Boch (617) 312-2100

Marcum LLP

Nichole Rene (203) 781-9690

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

Amy Burgess (817) 602-8651

NEAD Insurance Trust

Charles Muise (781) 706-6944

Northeast Dealer Services

Johna Cutlip (401) 243-7331

OCD Tech

Michael Hammond (844) 623-8324

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

Samet & Company

John J. Czyzewski (617) 731-1222

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

Rick Pasquatelli (508) 768-7640

The Towne Law Firm P.C.

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

TrueCar

Pat Watson (803) 360-6094

Truist

Andrew Carmer (401) 409-9467

US Bank

Vincent Gaglia (716) 649-0581

Wells Fargo Dealer Services

Josh Tobin (508) 951-8334

Withum

Kevin Carnes (617) 471-1120

Zurich American Insurance Company

Steven Megee (774) 210-0092

“In Action” Versus “Inaction”

Even with Extra Time, Legislature Fails to

Complete Work

By Robert O’Koniewski, Esq. MSADA Executive Vice President

rokoniewski@msada.org

Follow us on X (formerly Twitter) • @MassAutoDealers

Usually, as the Legislature approaches its statutory deadlines, our elected officials find a way to complete work on any number of priorities they have had nineteen months to address. This year, however, even with an extra ten hours of added time after its July 31 deadline, watching our Legislature in action really was nothing more than legislative inaction. The final bang of the gavel right before 10 a.m. on August 1 brought to a close the formal meetings of the current two-year legislative session. The scorecard revealed that the General Court had only approved two conference committee recommendations, while the work of eleven remaining conference committees formed to resolve competing bills coming from the House and Senate failed to reach agreements before the end of the formal sessions.

Our Beacon Hill solons, within a heavily oneparty dominated body with no effective GOP opposition to hold anyone accountable, are wont to do whatever they want – when one writes the rules and controls their use, one can always just suspend the rules.

This year, in what is becoming standard practice, in a manner that would make any world football observer proud, our legislators invoked “extra time” to extend, by almost another half-day, July 31’s formal session, the last for 2024, in order to hold out hope for the completion of work on a

number of conference committees that had been languishing for the past week or longer. However, that all went for naught. By the time the session ended, the Legislature uttered a collective “Alas, at least we have the informal sessions through December” and went home.

Matters that the Legislature failed to take up included a diverse range of topics as maternal health care, early education, substance abuse, prescription drug pricing, hospital oversight reforms, long-term care, rainy day fund interest investment, and Boston liquor licenses.

During the July “rush” to complete work on substantive matters requiring roll calls, there were three bills we were actively working on: the FY25 budget (House 2), economic development (House 4789), and clean energy (Senate 2829).

By approving a conference committee agreement on the FY25 $58 billion budget and sending it to the governor on July 19, the Legislature at least left themselves a day or two to override any vetos the governor could send it. This year marked the 14th straight year our state politicians were not able to have a budget in place for the July 1 start of the fiscal year.

The budget conference committee had before it at least one matter of interest to new and used-car dealers: e-titles. During the House budget debate, we were able to successfully lobby that chamber

to include in the bill three outside sections that would call for the Registrar of Motor Vehicles to establish a process for not only accepting electronic signatures on all vehicle transactional documents, including titles and all odometer statements, but also creating an e-title process in lieu of the current paper title requirement.

Although identical language was proposed as an amendment for Senate consideration, the Senate ultimately took no action on e-titles, thinking it best to have it resolved during the conference committee discussions. However, the conference committee did not make a decision on this piece and, instead, kept it before them in conference, perhaps allowing for something to be done before the end of the year, a path of action we are pursuing.

As for that economic development bill, the House passed its version in June, with the Senate approving its version after the Independence Day break. The Senate, to our benefit, included language regarding insurance companies’ compensation to auto body repairers for the labor rate portion of insurance-pay repair work. The Senate included this language in last year’s FY24 budget and the 2022 economic development bill, only to be rebuffed by the House each time. Unfortunately, the solons went home on August 1 leaving the economic development bill still on the todo list. Legislators have been conversing about attempts to resurrect the bill during the informals, a possibility but a heavy lift for any controversial matters within either the House or Senate bills when bills can get approved only with the unanimous consent of those present.

Finally, conference committee talks on the clean energy bill, which included monies for building out an EV charging infrastructure and reforming the siting of wind, solar, and hydro generation projects, immediately got off to a rough start between the two lead conferees and never recovered before July 31. There is talk of creating a “skinny” bill to address matters of potential easy agreement. This matter,

too, will require additional attention as we complete the year.

As always in our full 24-month session, our constant vigilance remains focused on these matters of interest as well as other pieces that could move during the twice a week informal sessions. We will provide updates as they may occur.

Another Technology Failure

As we all are fond of saying, technology is great until it is not.

On the heels of dealer efforts to rebound from the CDK cyberattack in mid-June, certain dealer and RMV operations were adversely impacted by a faulty system-wide software update initiated by CrowdStrike. Much as we saw with CDK’s efforts to get things back to normal, cyber criminals love to take advantage of the chaos.

In the wake of the July 19 global CrowdStrike outage, cybercriminals seized the opportunity to target automotive dealerships with sophisticated phishing attacks. Bad actors crafted counterfeit domains that mimic CrowdStrike’s, deceiving dealers into believing they were in communication with CrowdStrike corporate.

The danger lies in the simplicity of the deception; it only takes one employee misled by these fraudulent communications to open the door to malware. Successful breaches can lead to ransomware attacks that seize control of dealership systems, denying access until a ransom is paid.

Well into July our dealers affected by the June 19 CDK cyberattack and subsequent system shutdown were engaging in efforts to bring their DMS and EVR/ELT operations back into service, threatened by similar phishing and other related schemes designed to penetrate access to their operations and customer information. (See item below.)

Security and your vigilance can never take a rest. We work with several cybersecurity firms who specialize in the

automotive dealership industry, including our endorsed partner ComplyAuto, who can recommend dealership IT resources to promptly block these identified counterfeit domains, whether or not they are current users of CrowdStrike services.

Never be shy to reach out to your Association on these matters. Better to be safe than sorry.

IRS Warns Dealers of Phishing Scams

Post-CDK incident, the Internal Revenue Service, as part of its e-News for the Clean Vehicle Industry, an IRS e-mail service, issued the following warning on July 12, which we covered in MSADA Bulletin #105:

“IRS Warns Car Dealers to Be Aware of Phishing Scams”

The Internal Revenue Service would like to remind car dealers and sellers to be aware of evolving phishing and smishing scams that could impact day-to-day operations of the business.

In light of the recent ransomware attack aimed at car dealers, the IRS is warning individuals and businesses to remain vigilant against these attacks. Fraudsters and identity thieves attempt to trick the recipient into clicking a suspicious link, filling out personal and financial information, or downloading a malware file onto their computer.

Scammers are relentless in their attempts to obtain sensitive financial and personal information, and impersonating the IRS remains a favorite tactic. The IRS urges car dealerships to be extra cautious about unsolicited messages and avoid clicking any links in an unsolicited email or text if they are uncertain.

The IRS continues to see a barrage of email and text scams targeting businesses and individual taxpayers. The IRS and the Security Summit partners continue to remind taxpayers, businesses, and tax professionals to be alert for a wide variety of these scams and schemes. Businesses such as car dealerships should remain alert

for targeted email and text scams aimed to disrupt their computer systems.

These businesses should be alert to fake communications posing as legitimate organizations. These messages arrive in the form of unsolicited texts or emails to lure unsuspecting victims to provide valuable information that can lead to identity theft or malicious malware installed on computer systems. There are two main types:

• Phishing: An email sent by fraudsters claiming to come from a legitimate source. The email lures the victims into the scam with a variety of ruses such as enticing victims to provide sensitive information.

• Smishing: A text or smartphone SMS message where scammers often use alarming language such as, “Your account has now been put on hold,” or “Unusual Activity Report,” with a bogus “Solutions” link to restore the recipient›s account.

Never click on any unsolicited communication as it may surreptitiously load malware. It may also be a way for malicious hackers to load ransomware that keeps the legitimate user from accessing their system and files.

In some cases, phishing emails appear to come from a legitimate sender or organization that has had their email account credentials stolen. Setting up twofactor or multi-factor authentication with their email provider will reduce the risk of individuals having their email account compromised.

Posing as a trusted organization, friend, or family member remains a common way to target individuals and businesses for various scams. Individuals and businesses should verify the identity of the sender by using another communication method, for instance, calling a number they independently know to be accurate, not the number provided in the email or text. What to do:

• Never respond to phishing or smishing or click on the URL link.

• Do not open any attachments. They can contain malicious code that may infect

the computer or mobile phone.

• Do not click on any links. If a taxpayer inadvertently clicked on links in a suspicious email or website and entered confidential information, visit the IRS’ identity protection page.

• Send the full email headers or forward the email as-is to phishing@irs.gov. Do not forward screenshots or scanned images of emails because this removes valuable information.

• Delete the original email.

Gov. Healey Signs New Wage Transparency Law

On July 31, Gov. Maura Healey (D) signed into law legislation (House 4890) that requires employers with 25 or more employees to post pay ranges alongside job openings. Additionally, the new law requires employers with more than 100 employees to file copies of federally required equal employment data with the Secretary of State’s office, which would then be forwarded to the Executive Office of Labor and Workforce Development. The law takes effect in 2025.

The Attorney General has enforcement authority and can impose fines or civil citations for violations of the law. The AG also is charged with conducting a public awareness campaign around the new rules. Finally, the law provides protections for employees against retaliation for asking for salary ranges when applying for a job or promotion.

Backers of the new law, including the Women’s Legislative Caucus, Associated Industries of Massachusetts, the Mass. AFL-CIO, and the Massachusetts Municipal Association, argue it will reduce gender and demographic wage gaps.

Members can access MSADA Bulletin #117 (8/1/24) for more information on this subject.

OSHA Rules Proposed to Protect Workers from Extreme Heat

On July 2, the U.S. Department of Labor released proposed rules that would establish federal safety standards under

which employers would be required to protect employees, working indoor and outdoor, from extreme heat.

According to The Wall Street Journal, the rules would require companies to develop plans to prevent heat-related injuries. Further, an employer would be required, in part, to provide water when the heat index climbs above 80 degrees Fahrenheit as well as access to shade or airconditioned break rooms. If the heat index exceeds 90 degrees, an employer would need to offer 15-minute paid rest breaks every two hours. An initial OSHA impact study estimated the cost to businesses at $3,085 per establishment per year.

Once the proposed rule is published in the Federal Register, the DOL will conduct a process for taking public comments. The rule would not take effect until a final rule is published in the Register. As for now, be aware that this is the direction the Biden administration is taking workplace protections for workers during extreme heat conditions. As with many Biden administration rules, one can expect a court challenge once a final rule is published.

Members can access MSADA Bulletin #103 (7/5/24) for more information on this subject.

Kenworth Northeast Open House

On July 11, Craig Herron held an open house for employees and customers at his newly renovated Kenworth Northeast heavy-duty truck dealership in Middleton. Included in the celebratory activities, Craig

held info sessions on the latest industry trends, including “The Future of Trucking and Alternative Fuels”, “Collision Avoidance and Safety Systems”, and “2025 CARB Regulations and CARB Certified Engines”.

Gov. Whitmer in Town

Just after the change at the top of the Democrat’s presidential standardbearer, in which the current president was supplanted by his vice president in

a move initiated by party elders, Gov. Gretchen Whitmer (D) of Michigan was in Boston for an event, hosted by State Rep. James Murphy (D-Weymouth), the House chair of the Joint Committee on Financial Services. Prior to the change at the top, Gov. Whitmer was on the shortlist of those eyed to replace the president. Subsequent to the change, she was included on the short-list of potential vice presidential nominees. As the election unfolds, the governor will serve an active campaign role in her state and others that some have on the toss-up list.

Annual Meeting – Nov. 1, Encore Casino

We will be holding our annual meeting on Friday, November 1, at the Encore Hotel and Casino, in Everett. We are in the process of developing our speakers line-up, running 1-5pm after our Noon welcome reception. The day will conclude with our cocktail reception, 5-8pm. Please

use the registration information that will be emailed to you to sign up. We look forward to seeing you on the first.

Our PACs - NADAPAC & NCDPAC

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

Each year MSADA expresses itself politically through NADA’s federal PAC, NADAPAC, and through our state PAC, the New Car Dealers Political Action Committee (NCDPAC).

We depend on contributions from our dealers to keep these PACs strong, as we need to have an active voice in Washington and on Beacon Hill. Contributions to our PACs are an inexpensive insurance policy. Since by law we cannot use our membership dues or other association revenues for political contributions, the PACs help us to remain strong politically as we advocate for our dealers’ interests in the political process.

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

MSADA Endorsed Vendor Services

Your Association has engaged several vendors this year for newly agreed upon endorsed services:

• Merchant Advocate works with retailers to analyze the credit card fees those businesses are charged and assessed in processing transactions. The savings can be considerable, as Merchant Advocate uncovers duplicate or unsubstantiated fees from the credit card companies. Over the last several years, they have saved retailers across the country over $380 million.

• Plug In America, through its PlugStar program, works with dealerships to train personnel, including salespersons, to be able to best address your customers’ needs and questions regarding electric vehicles. They presently work with dealerships in over 30 states to assist dealer-

MSADA

ships in the transition to EV sales and servicing.

• ComplyAuto works with dealers’ compliance efforts on privacy and cybersecurity platforms, FTC Safeguards Rule, advertising, AI-powered sales, workplace safety and OSHA-related rules, and HR policies and employee training.

• Sprague Energy works with businesses to analyze their electric and gas charges in an attempt to provide them with reduced charges for such services. Sprague works with a number of Massachusetts dealerships currently in those efforts. In addition, we want to remind you of several vendors who have been long-time partners of your Association:

• Ethos Group, who can improve your F&I products, services, and compliance.

• Reynolds & Reynolds, who, through its LAW Library program, is our partner for forms sales and compliance.

• Withum (formerly O’Connor & Drew), who is our accounting partner.

• American Fidelity, who can assist you with health and other insurance-based benefit products for your employees. Check out the ads for most of these companies in this month’s Auto Dealer magazine.

Tell Us About Your Giving

We always love to here from our dealers about their charitable efforts and community assistance they do throughout the year. Whether it is big or small, makes no matter. It all helps your fellow citizens in some manner. Be sure to pass it on to us so we can recognize these efforts in our magazine.

EGISLATIVE S CORECARD

JULY 2024

BILL# SPONSOR SUBJECT

S151

H331

H290

H329

S204

H270

H289

S150

H351

Sen Crighton Rep Hunt

Rep Finn

Rep Howitt

Sen O’Connor

Rep Chan

Rep Finn

Sen Crighton

Rep Lewis

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

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

Creates process to appeal improperly issued Class 1 license.

Modernize on-line vehicle purchase process.

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

S220 H400 Sen Velis Rep Walsh Open safety recalls notifications.

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

(The so-called “Tesla Exemption.”)

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

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

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

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

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

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

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

S688

H1095

H1118

S639

H1121

H995

Sen Moore

Rep McMurtry

Rep Philips

Sen Feeney

Rep Puppolo

Rep Donahue

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

Protects consumer choice in vehicle service contracts.

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

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

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

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

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

S2210

Sen Crighton

Sen Creem Rep Carey

Safety shutoff for keyless ignition technology.

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

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

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

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

Cybersecurity for Dealerships Building a Layered Defense

Actionable tips based on realworld experience assessing dealership security

By David Cantor-Adams OCD Tech

You run a busy dealership. Sales are robust, the service department is active. Every day, customers come and go from the service department waiting area. The service garage space has a sign that says “No CustomersAallowed”, but the occasional customer wanders into the garage space to check on his or her car. Some people drift into the show rooms while others just settle into a chair and turn on their laptops.

Conduct regular training on both physical security and safe online practices.

When it comes to protecting customer data, auto dealerships face unique challenges due to the multi-use nature of showrooms, which are spaces open to the public for both sales and repair. Unlike a traditional office, sales and service workspaces are exposed. The nature of the business means many strangers will pass through the dealership daily. It is a busy environment where you want to balance the difficulties of welcoming the public while also maintaining security.

The most effective approach to protecting your customers and their personal information is to diversify your defense strategies so that every aspect of your business is hardened against an intrusive event.

Cybersecurity professionals often utilize the concept of “layers of defense” to achieve control robustness. The idea is that you are implementing security in several overlapping ways to slow down or even prevent a security breach all together.

Here are five layers of defense that combined will make your dealership and data more secure.

Policies, Procedures, and Awareness

Proactive digital security starts at the top of an organization. You should have a robust policy set that includes acceptable use of technology for employees, detailed procedures to manage vendors, a Written Information Security Plan (WISP), and a plan to regularly assess vulnerabilities across the organization.

Establish processes and procedures to detect, respond to, and recover from security incidents. Document those in an Incident Response Plan and test the plan regularly to ensure it provides value during an incident.

Are your employees getting adequate security awareness training? Conduct regular training on both physical security and safe online practices. Utilize email phishing training to keep users informed about emerging threats. Employees are your best defense and raising their overall knowledge about security best practices will reduce the likelihood of them falling for a social engineering attack.

18 CYBERSECURITY FOR DEALERSHIPS

Putting non-company devices on a wireless connection allows you significantly more control over who has access to your resources and makes attacks harder.

Physical Security

In a sales setting, creating physical security does not have to be intrusive. In fact, it can be part of your sales effort. By diligently educating your employees and implementing security focused polices, you can effectively bolster defenses while building trust and good-will with your customers.

Employees should be trained to pay attention to unfamiliar people and restrict customer access to employee spaces as much as possible. Make note when the same people are showing up multiple times. Consider having a “greeter” who meets customers as they come in and enquires about their needs. Show signs of monitoring the public spaces. Cameras can serve as an excellent deterrent and should be utilized in every public space. Utilize signage and training to reinforce to both customers and employees that garage/service bay visits require an escort.

Offering Guest wireless is expected by customers. Make sure you are offering password protected network access and post signs with the SSID and password in many locations, so the customer knows exactly what to sign into. The guest wireless should be effectively segmented from your production network. Guest networks should provide internet access only, with content screening for appropriateness in a public space. A security firm, your internal IT personnel, or a managed service provider should test this periodically to confirm that company resources are not accessible by customers on the guest wireless. We often find that

misconfiguration of wireless violates this principle, which can have devastating impact.

Make sure that workstations located in public spaces are enclosed. Specifically, block access to the back of the device and do not run switches or other connectivity devices on desks or in accessible spaces. Manage wiring and tie up loose cables so that no open connections are exposed.

Store physical data securely when not in use by locking offices, filing cabinets, or data storage rooms where feasible, ensuring only authorized personnel have access. While often overlooked, after-hours cleaning staff, maintenance personnel, and visitors pose potential risks to physical data due to their proximity, accessibility, and trust within the premises. Be sure to establish visitor and maintenance management procedures to track and monitor individuals entering areas where customer information is stored or processed.

Network Perimeter Defense

The corporate network and internet are critical assets that literally run the business. While technology is expensive to purchase and support, it has become essential for selling a car. Make sure your firewalls and switches are reviewed and patched regularly. Newer firewalls are equipped with more current encryption ciphers and offer traffic monitoring usually with utilization graphs accessible from the browser. Firewalls represent the digital front

door at your dealership so you should make a point of keeping those devices current. Acquire support contracts on routers, access points, and switches to ensure that firmware is monitored and updated as new patches are released.

Another reason to have a current firewall or similar security appliance is to utilize intrusion detection and prevention systems to monitor network traffic for malicious activities or security policy violations. Often, a managed service provider will offer additional monitoring services for firewalls, servers, and workstations. Leverage these services for additional peace of mind. But at the very least, have annual security check-ups conducted to measure the effectiveness of your cybersecurity program.

physical access to the wired network by deactivating wall jacks throughout the public spaces.

Internal Network Security

Secure your internal network by keeping workstations up to date with the latest patches and firmware updates. When software companies announce flaws that require patching, there is a race between the attackers, vendors, and users of the vulnerable device. The sooner operating systems and software are patched and virus signatures are updated, the shorter the window available to potentially compromise customer data. Most vulnerabilities that get exploited are ones that have already been identified and fixed by the manufacturer. It is also advisable to remove unnecessary software to reduce attack surface and ensure applications are on current versions.

if you are managing more than five workstations, you should consider utilizing an identity and access management system...These subscription-based cloud applications will ensure that users and devices are authorized to access your network and must authenticate their identity when using corporate resources.

Lastly, take advantage of wireless technology. Putting non-company devices on a wireless connection allows you significantly more control over who has access to your resources and makes attacks harder. Utilizing a wireless guest network lets you limit

While you are reviewing your software patching, take a good look at your virus or malware product. Is it scanning activity in real time? Does it monitor both web activity and malicious code? Invest in a quality endpoint detection and response package for your workstations. Endpoint products will monitor the device for malware, viruses, and malicious code and potentially prevent a ransomware or other attack from being successful or spreading. All operating systems are susceptible to compromise and should have proactive malware detection. Gartner has helpful resources to aid in evaluation and comparison of endpoint protection products.

Finally, if you are managing more than five workstations, you should consider utilizing an identity and access management system such as Microsoft Entra ID or Jumpcloud. These subscription-based cloud applications will ensure that users and devices are authorized to access your network and must authenticate their identity when using corporate resources. They also allow for easy application of security controls consistently across all computers. Things like account passwords, idle time lock out, etc.

20 CYBERSECURITY FOR DEALERSHIPS

Data Security

Conclusion

Just like physical security, training your employees to be situationally aware will help secure customer data. Keep desks free of visible sensitive information when not actively in use. Promptly collect all documents from printers as soon as sending the job. This is especially true for a shared printer located in openly accessible spaces. Lock drawers and doors when leaving work areas that house sensitive and customer information.

As far as securing the workstations that access customer data goes, all operating systems have the aforementioned screen saver (inactivity) feature built right in that will blank the screen and require an unlock password.

Encrypting hard drives is another viable method to protect your data. Both BitLocker on Windows systems and FileVault on MacOS are free products built right into the operating system. Once a hard drive is encrypted, it cannot be installed into a different machine to access its contents.

Even more important is to use secure services that encrypt transmissions when collecting sensitive customer data such as licenses or loan applications. Encourage employees to enter or scan customer information directly into secure applications or databases instead of printing or copying the item.

If you do have printed documents containing customer information, be sure to have either local shredders or a shredding service and collection bins.

While you might already be implementing some of these suggestions, remember that the more layered the security changes you make, the more difficult it is for an attacker to compromise your data and your customer’s private information. Ask your internal IT person or managed service provider about your firewall or patching processes. It is always advisable to have a third-party review conducted to test the security measures you have in place.

Several described items such as encryption and establishing policies such as a WISP are required by law and enforced by state or federal authorities such as the FTC. In fact, the FTC Safeguards have required many of these items since June 2023. It is always worth noting that the FTC Safeguards should be treated as a starting point for your layered security program, not a destination. The Safeguards were designed with a specific purpose – to protect consumer information. But the onus is on you to protect your company’s proprietary information, availability of services, and reputation above and beyond these required practices.

All this effort can be a reassuring message to deliver to your customers. Providing examples throughout the sales and then financing and insurance processes of how you are securing customer data will enhance your credibility and build trust that will carry into the future. It is a compelling story to tell your customers and another reason to make layers of defense a priority in your environment.

NEWS from Around the h orn MSADA

SUDBURY

Herb Chambers Unveils relocated and Enhanced Mercedes-Benz Facility

Herb Chambers recently announced the grand opening of its newly relocated and enhanced Mercedes-Benz dealership. Strategically designed with customers in mind, the new location at 141 Boston Post Road, Route 20, Sudbury, is only 6 short miles away from its previous home and promises to elevate the luxury automotive experience to new heights.

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

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

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

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

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

METHUEN

Grieco auto Group Buys dan o’Brien CdJr

This month Nancy Phillips Associates announced the sale of Dan O’Brien Chrysler Dodge Jeep Ram in Methuen to Grieco Automotive Group.

This acquisition adds Chrysler, Dodge, Jeep, and Ram to the growing number of franchises operated in the states of Rhode Island, Massachusetts, Connecticut, Florida, and California represented by Rhode Island-based Grieco Automotive Group.

The dealership is now known as Grieco Chrysler Dodge Jeep Ram.

Dan O’Brien Auto Group has divested of its dealership holdings over the last few years with all transactions orchestrated by Nancy Phillips Associates. Dan O’Brien will be taking time to focus on his family during an extended but temporary break from the industry.

MICHIGAN

stellantis offers

Us Employees

Buyouts in New round of Job Cuts

Bloomberg News

At the end of July, Stellantis NV announced it will offer voluntary buyouts to US employees as the carmaker looks to cut costs amid slumping profits.

Non-unionized US workers from vice president level and below in certain functions can opt for the package, which is intended to “assist those interested in pursuing other career options or retirement,” Stellantis said in a message sent to employees that was seen by Bloomberg. There will be no minimum service requirement to be eligible for the offer, unlike previous programs, the letter said.

A Stellantis media representative declined to comment on the total number of job cuts targeted.

Automakers including the maker of Jeep SUVs and Ram pickups

2416 NEWS from Around the h orn MSADA

are under pressure from waning demand from consumers squeezed by rising expenses and huge investments needed to electrify their vehicles. First-half earnings fell sharply at the Amsterdam-based automaker as soft demand fueled lower vehicle sales in the US and Europe. Chief Executive Officer Carlos Tavares has pledged a further €500 million ($540 million) in savings in the second half compared with the first six months of 2024.

The company has also already cut about 400 salaried engineering jobs in the US earlier this year. Stellantis, increasingly criticized by analysts for its lack of innovative new car models, announced it has started shipments of China-made Leapmotor vehicles to European ports.

MCLEAN, VIRGINIA

recent Nada academy Graduates

The following Massachusetts dealership employees recently graduated NADA Academy:

• Andrew Arens, Patriot Subaru of North Attleboro

• Michael Iovanna, Pride Chevrolet, Lynn

• Craig Redegeld, Patriot Subaru of North Attleboro

Congratulations and good luck with your endeavors in our industry.

PARIS

Investment in Critical Minerals in Web of doubt, Industry says

Reuters

Many companies are reluctant to invest in critical minerals and energy transition projects due to uncertainty about consumer demand for EVs and government commitment to zero-carbon goals, industry players said recently.

The long-term picture is intact of a world needing large quantities of materials such as lithium, cobalt, and copper to enable the world to give up using fossil fuels. The timing of the next several years, however, is in question, they said at the World Materials Forum in Paris in mid-July.

Both the European Union and 12 U.S. states aim to ban new petrol car sales by 2035, but there has been a push-back about those targets.

“I think there is a lot of doubt right now that this will happen,” Mathias Miedreich, former CEO of Belgium recycling and battery materials group Umicore, told the conference. “That makes it very difficult to invest.”

In May Miedreich stepped down from Umicore, which lowered its 2024 profit forecast the following month due to weak demand projections for battery materials due to a slowing EV market. Sales of new battery-electric cars in the EU dropped 12% in May from a year earlier.

“Financing was not a big issue a few years ago,” said Stephane

Michel, president of TotalEnergies Gas, Renewables & Power unit. “You can still find capital now, but you have to have the right project.”

TotalEnergies is part of the ACC EV battery joint venture including automakers Stellantis and Mercedes, which last month paused plans for German and Italian plants.

An executive with a major European chemicals group that supplies battery materials said many companies are assuming that there will be a delay of about two years in the energy transition with 2030 projections now being moved back to 2032.

“That’s the view now, but it could change and be more serious, it’s hard to say,” the executive told Reuters, declining to be named because he was not authorized to speak to the media.

An executive of a global company involved in EV battery materials said demand for critical materials in China and Asia was holding up better than in the Europe and the United States.

“The question is where do we put our next capacity. You have to be very agile, the market is moving very fast,” he said.

EUROPE

Chinese EVs Nab record 11% share in Europe ahead of Tariffs

Bloomberg News

Chinese brands captured 11% of the European electric-car market in June, notching record registrations as manufacturers raced to beat stiff European Union tariffs that took effect early this month.

SAIC Motor Corp. led the charge, shipping its MG4 hatchback to dealers in volume, according to analysts at researcher Dataforce,

NEWS from Around the h orn MSADA

which compiled the figures. Cars registered before July 5 could be sold to customers without the added duties on imported EVs.

Chinese brands registered more than 23,000 battery-electric vehicles across the region during the month, the most ever, Dataforce figures show. Their 72% sequential jump from May was twice the gain in overall European EV registrations for June. Chinese-made imports from Western manufacturers including Volvo Car AB, BMW AG, and Tesla Inc. are also subject to the new levies.

Whether the volume gains can be sustained will be closely watched in the coming months, as the added EU tariffs take hold. The EU’s provisional charges subject SAIC to an additional 38% fee, while BYD will pay an extra 17% on the existing 10% customs duty.

Carmakers on both continents are rushing to add European EV manufacturing so they can avoid the new duties, while tensions between Beijing and Brussels risk devolving into a trade war.

While state-owned SAIC was responsible for the biggest jump in Chinese-branded imports, some 40% of the MG4s registered in June were self-registrations by dealers — “not a very healthy growth,” said Gabriel Juhas, head of product at Dataforce.

The carmaker is offering generous leasing deals, including a two-for-one MG4 promotion in Germany, where EV sales have sputtered.

Conversely, there were signs of durable progress for BYD Co., the world’s largest plug-in vehicle maker. A marketing push centered on the Euro 2024 football tournament held in Germany gained real traction with consumers, said Julian Litzinger, a Dataforce analyst.

Another driver of the European EV market in June was the introduction of incentives in Italy, which helped to spur a doubling of battery-electric sales in the country from a year ago. About €200 million in new-EV subsidies ran out in less than nine hours, the government said in a statement. About 60% was tapped by families and the rest by companies.

The rise vaulted Italy, which has been lagging in EV sales, into the top six of a regional market that includes EU states, countries like Norway and Switzerland that participate in its single market, and the UK.

European policymakers are trying to strike a balance between easing access to less-expensive Chinese-made EVs that would aid progress toward sustainability goals and protecting the legacy automaking industry in a tough economy.

Germany, for example, is struggling to generate meaningful growth, making higher-cost EVs from BMW, Volkswagen AG, and Mercedes-Benz Group AG less affordable to strapped consumers.

In Italy, the government has cracked down recently on imports found to be branded as Italian-made. Prime Minister Giorgia Meloni is also courting Chinese President Xi Jinping, visiting China this month to smooth the relationship as her government seeks to attract Chinese manufacturers.

European carmakers have also joined forces with Chinese counterparts. Stellantis that it began shipping EVs from China under a

joint venture with Zhejiang Leapmotor Technology Co. The JV has already started assembling pre-production EVs at a Stellantis plant in Poland.

Overall, June was the third-highest month ever for EV volumes with 208,872 registrations across the region, according to the European Automobile Manufacturers’ Association, behind December 2022 and March 2023, and just ahead of June 2023.

JAPAN

Nissan, Honda to Jointly research software, start Talks with Mitsubishi

Reuters

Japanese automakers Nissan Motor and Honda Motor have agreed to conduct joint research into technologies for a next-generation software platform, they recently announced in a joint statement.

The companies also signed a memorandum of understanding to deepen the strategic partnership they announced in March, pledging to cooperate in areas such as batteries, e-axles, and vehicle complementation.

The automakers signed another memorandum of understanding with Mitsubishi Motors, which is 34% owned by Nissan, to discuss a framework to collaborate on vehicle electrification based on Honda’s and Nissan’s agreement from March, they said in a separate statement.

Nissan and Honda aim to conduct the basic research into technologies for the next-generation software platform in about a year, they said in their joint statement. The push comes as both companies, Japan’s third and second biggest automakers after Toyota, still have to significantly step up electric-vehicle sales and have been losing share in key market China where both have made large investments.

The pair, which had combined global sales of 7.4 million vehicles in 2023, face growing competition from legacy global brands that have rolled out EVs at a swifter pace and players such as Tesla and China’s BYD. Nissan and Honda will benefit from the cooperation on software as factors such as the ability to process data and the number of engineers working in the area boost competitiveness, Honda CEO Toshihiro Mibe said.

They will seek to standardize the specifications of EV battery cell modules from a mid- to long-term perspective, aiming to make it possible to use the batteries they plan to procure in vehicles from both companies, they said. The companies said they will look into whether lithium-ion EV batteries made by L-H Battery Company, a joint venture between Honda and South Korea’s LG Energy Solution, can be supplied to Nissan in North America from 2028 or later. They will aim to standardize specifications of the e-axles that they will use in a future generation of battery-powered vehicles, the companies said.

Protecting Your Dealership’s Financial Well-Being

By Matthew Marcoullier

CPA, Albin Randall & Bennett

For many dealers, it has been several years since they have had to actively manage the financial health of their dealerships. Grosses were at historical highs, demand outpaced supply, interest rates were low – it was easy to feel, and be, financially secure. Fast-forward to today, and essentially all of those comforts are gone: volume is holding

have a significant, negative impact on your operations. Are the types of risks you identify something that you can insure against? Is your coverage adequate? What does filing a claim do to your premiums or ability to obtain coverage in the future? It is important to review your insurance coverage and assess whether it is providing the protection you are expecting. Make sure you understand your policies, and watch out for language that may present an obstacle to having a claim paid.

Another important aspect of risk management is having a current disaster recovery plan in place and ensuring that there is an appointed person who is responsible for maintaining, updating, and enacting the plan. In the Northeast, we have seen

Dealers that can be strategic and disciplined in their approach to inventory and expense control will be better positioned for future success and riding out any downturns.

on, but grosses are back near pre-pandemic levels; inventories are building (especially for certain franchises); and interest rates are at their highest level in over twenty years. These challenges create enough uncertainty without throwing in something like the CDK incident that many dealers are only now recovering from. However, this does not mean that times are bad, but it does mean dealers need to pay attention to, and actively manage, the financial well-being of their dealerships. Below are some issues we think dealers should consider as they look for opportunities to strengthen and safeguard their financial position.

Risk Assessment and Management

It is difficult to protect yourself if you have not done an assessment of the risks and threats faced by your dealership. Now is a good time to look at your stores and try to determine the types of events that could

everything from flooding and ice storms to cyberattacks over the last year. The ability to quickly get back on your feet is key to weathering any disaster.

Financial Planning and Measurement

As grosses have started to shrink, it is important to plan and prioritize how that money will be spent. The first half of 2024 has seen the full resurgence of advertising and floorplan interest expense, and these items, which have been far below historical levels since 2020, are once again taking a significant piece of that now diminished gross. Coming up with forecasts and budgeting what you want to spend on a PVR or absolute basis and then holding your team accountable for hitting those targets will be crucial to maintaining healthy operations. Inventory management and optimizing turnover will be another key to success in the latter half of 2024 and going forward.

Dealers that can be strategic and disciplined in their approach to inventory and expense control will be better positioned for future success and riding out any downturns.

Customer Satisfaction and Employee Development

Well-trained employees make fewer mistakes, are more engaged, and create a more positive customer experience. By investing in your employees and developing your team, you can give them the skills they need to be successful and help keep them engaged, which is a powerful tool for retention. It is expensive and inefficient to continually retrain new employees. By reducing dealership turnover, you can save money and help ensure you have a knowledgeable and skilled team working with your customers. As competition increases and bottom lines are reduced, it is important to make sure you are getting the most out of your sales opportunities. Failing to close on leads or having comebacks in service diminishes the customer experience and negatively impacts both current, and potential future, sales.

None of these items are necessarily new or novel concepts but represent more of a return to the fundamentals of running a successful business in a highly competitive industry. General economic conditions, pressure from OEMs, and intense regulatory scrutiny are all challenges faced by auto dealers, so it is important for dealers to be on their toes and make sure they are not overexposed at any given time. Finding new ways to implement and embrace technology and thinking outside the box are still important for growth, but we see a return to the basics, with active monitoring and oversight of performance, as the pillar to safeguarding your financial resources. Dealers that can embrace this approach and remain disciplined will be those best positioned for continued success.

Parts Reconciliation to the Rescue!

By Jen Moylan

Lead Consultant, Withum

A recent case reported in the Automotive News discussed when a parts manager at a Vermont dealership pleaded guilty to ordering parts from the OEM, not stocking them into the dealer’s DMS, and selling them personally on Facebook. Between the parts cost and the FedEx account being used to ship these ‘sales,’ the dealership lost $575,000 in less than four years.

A similar case occurred in 2009 when a Nebraska parts manager ordered special order parts for body shops but voided the sale invoices once the SOP order went through to the manufacturer. Parts received were set aside and sold on eBay. Total dealership loss: over $280,000 over four years.

I hope you are thinking the same thing I did. What about an annual physical inventory of parts and the monthly parts pad-to-general ledger reconciliation? Let’s dive deeper into how these two normal operating processes should have halted the scam.

We strongly encourage dealerships to have an outside party perform an annual parts physical inventory and adjust the general ledger accordingly. It is not something to complete and forget, however; keep track of each year’s result. Are you writing off $50,000 every year? That adds up to huge numbers, as we saw in the cases above. What steps are taken as a result of the write-off; is there any sort of investigation into how this happened? That is an awful lot of parts to be lost or broken. Keep a spreadsheet to track each year’s adjustment. It goes without saying that large write-offs occurring each year indicate a problem.

While the annual physical is an import-

ant tool, the monthly Parts Pad to General Ledger reconciliation has more potential to discover the source of the problem. It is not unusual to see large swings in the difference between accounting and the parts inventory; timing is usually to blame. Parts might receive a stock order on the last day of the month, and their inventory may grow by $30,000. If accounting does not receive the invoice for those parts until the 3rd of the new month, they will close with a lower general ledger balance than parts since they have not recorded the newest purchase by month end. Another month may show accounting higher if parts has done a large return to the manufacturer, which has not yet been credited to the parts statement. These ebbs and flows are not concerning. A problem is indicated when the difference continues to grow month after month.

Common reasons? Here are a few I have observed firsthand:

• Incorrect allocation of parts purchases. This could happen if the parts department does not code accounts on purchases. I have seen offices include freight in the inventory account, which is inflating the account balance. Have a stamp made up with lines for each likely account number on parts purchases: parts inventory, miscellaneous inventory (tires, cores, etc), freight, and discount. The parts manager then fills in the figures for accounting to post.

• Rejected parts returns. When a return is created, parts are removed from the pad and, thus, parts inventory. Accounting usually does not learn of the return until the credit is received, and they probably do not know if the return was accepted and paid in full. The parts return could be created to send back 100 items. If the OEM only receives or accepts 70 items, however, they will not be paying for the missing parts. The parts department has removed 100 items from the pad, but accounting is posting a credit for only 70. I recommend that parts return documentation be shared with the office for tracking. Create a sub-account for receivables for parts returned to the factory pending credit. Some manufacturers will accept obsolescence returns but at a reduced credit amount. If the manufacturer is paying only 40% of cost for these aged parts, the other 60% still has to be removed from the general ledger. Parts needs to communicate with the office in unusual circumstances like this.

• Negative quantity on hand. Often, a part will be billed to a repair company while the part is on backorder, creating a negative count on the pad. When the part is received, it should be stocked on the DMS, thus relieving the negative count. However, it could just be handed over to the technician, and the negative value is never removed. If that part is never stocked into the parts pad, accounting will have a

higher value, since they are the only side who has recorded the purchase.

• Bulk oil. Every time your dealership receives an oil delivery, it is likely the price of the oil has changed. Accounting will record the purchase price at actual cost on the vendor’s invoice, but the parts department will only record the quantity received and may not check the cost associated with the oil’s part number. Your pad value could be significantly impacted in this high turn part if the cost has not been updated in years.

• Emergency purchases. If you frequently purchase parts from neighboring dealers, you are paying a markup that will not be reflected on the parts pad, contributing to a higher general ledger balance. When submitting the vendor invoice to accounting, the parts department should code these purchase invoices to match the pad value. The markup should be coded to the inventory adjustment account, which will be offset against discounts. NonOEM parts should be recorded on the pad at the actual purchase price.

• Appreciation/Depreciation and other adjustments. Every month, the manufacturer will adjust the costs of certain parts. Some may decrease in value, but typically we see appreciation. Parts costs increase, and these updates will provide the net change in the value of inventory. Many dealerships record this monthly, but some choose to wait until year-end, netting it against any possible loss when the parts physical inventory is completed. If your store waits to book appreciation, the parts pad will be higher than accounting. Be sure to include the total unrecorded price change on the pad to GL reconciliation. Adjustments after completing the physical inventory are usually held for year-end; this pending adjustment should also be recorded on each monthly reconciliation until it is posted.

• Manual adjustments. On any given day, authorized parts employees may need to record adjustments to quantities on hand. They may go to a bin to pull a part and find that the part is not on the shelf, although the DMS shows one in stock. So that part will be manually adjusted to re-

move it from the pad. Accounting should be notified of adjustments like this – not to record in accounting, but to add to the reconciliation. I suggest a spreadsheet be kept detailing the part, date, value, and any other details the parts manager can provide. Some manual adjustments are to correct errors when stocking in parts and have no bearing on accounting at all. I have seen many cases of a quantity of 10 items being accidentally keyed in as 100. When discovered, there may be a large negative adjustment, such as removing the extra 90 items. This would not affect the pad-to-GL reconciliation.

• Pending parts invoices. Parts counter tickets are similar to open repair orders. Parts move off the pad onto an invoice, but the value is not deducted from the general ledger until the ticket is closed (paid or added to an accounts receivable balance). These should be reconciling items on the pad to GL rec, but take a deeper look at how old these tickets are. It is possible these parts were never picked up. The A/R customer may have exceeded their credit limit and tickets were left in pending (but parts were released). I have found shop tickets that were never closed, as well as unsettled employee purchases. The parts department should never hand the part and the invoice to a customer and instruct them to pay the cashier at another counter. The customer must return to the counter and show their paid receipt in order to receive the parts they purchased.

• Warranty adjustments. What happens if parts claimed for warranty repair are rejected? Make sure these items are written off and not simply added back to inventory. I notice many dealerships will hold warranty repair orders open until the claim is paid. I feel this is an unsafe practice, as the warranty administrator could remove parts and labor that is not included in the claim payment. If the parts are gone, they cannot be re-added to inventory. Often, the admin leaves the ticket open to add parts that are essential to the repair but have not been billed out. Ask your administrator how frequently that happens. If the parts department forgets

to charge out parts on warranty claims, odds are they are also forgetting on customer pay and internal work, too.

• Accounting error. A quick look at the general ledger detail for the month might point to an incorrect account number being used. Look for entries to the inventory account from unusual sources, like New Vehicle Purchases or Payroll. Try sorting the details by dollar amount to look for duplicate postings. Follow up on journal entries affecting parts inventory that are not the monthly appreciation/depreciation adjustment.

When accounting compares its figures to the parts manager’s, they should be relatively close; typically, a 2-5% variance is considered to be acceptable. Most differences are due to timing; you can expect to see the variance change each month. Sometimes, accounting will be higher. Next month it may be lower. We do not want to see a variance that grows monthly – for example, accounting inventory exceeds the parts side total by $15,000 this month, next month it is $22,000, and the following month it is $38,000. Something is happening on a consistent basis to drive these two figures further apart.

Most differences will be timing and accounting errors. Could your difference be due to theft? Look carefully at manual adjustments and voided parts invoices. Who has the authority to perform either of these tasks? Spot check large value parts purchases: Have they been stocked in on the pad? Is the parts department secured, and who has access? Look at the aging of SOP parts on backorder. Is there an excessive amount of negative quantity on hand items? Match FedEx and UPS fees for outgoing packages to the parts sale.

With literally so many moving parts, this is the most challenging inventory to reconcile. Errors add up quickly, leading to costly year-end adjustments. Need help with your reconciliation? Withum has six former controllers and fixed operations directors available to get your reconciliation questions answered. Do not let the differences in your parts inventory get out of control!

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CDK Breach Update – Next Steps for Dealers

By Tom Vangel, Esq.

James Radke, Esq.

Lindsey McComber, Esq.

Murtha Cullina LLP

Last month’s CDK data breach wreaked havoc on the automotive community and caused major disruptions to the business operations of approximately 15,000 dealerships across the U.S. and Canada. The attack paralyzed the operations of nearly all dealerships relying on the CDK software, and, as a result, these dealerships were forced to use manual processes, which slowed sale operations significantly during one of the busiest seasons in the industry.

Although the public has not been made aware of the full effect of the breach and what information was stolen, it has been reported that the breaches exposed the financial information, sensitive customer data, and driver’s licenses for tens of thousands of dealership customers. In addition, during the outage, sales representatives at various dealerships struggled to close and finance deals, with the full financial impact of the attack still to be determined. Although CDK Global’s CEO has told dealers that the company will compensate them in some way, it is unclear when or how much compensation dealers will receive.

As a result, many dealerships filed lawsuits against CDK that are still in the early stages of litigation. In Complaints that were filed in the U.S. District Courts for the Northern District of Illinois and the Southern District of Florida, the plaintiff dealers allege that CDK negligently failed to protect consumer information. They claim that this negligence exposed consumer personal information and brought

sales, financing, and payroll operations to a halt and, therefore, are seeking damages arising from the loss of business.

Many dealers are asking what changes can be made to avoid or mitigate these risks in the future. While it appears impossible to eliminate the risk of a data breach in today’s digital world, there are certain immediate steps that dealers can take to mitigate their losses and liabilities from the CDK breach and protect their businesses in the future. These include ensuring that the records of sales completed during the outage are properly accounted for, informing themselves about their reporting obligations to state and federal regulators, starting the claims process for any applicable cyber insurance policy, and reviewing vendor contracts.

Although the CDK software is now restored, it may still take weeks or months to get all the data restored and for operations to return to normal. Dealers must ensure that their accounting departments assemble and properly account for business transacted during the outage. Further, dealers must stay up to date on their data breach notification obligations. CDK reached an agreement with the Federal Trade Commission to permit CDK to file a single, consolidated breach notification on behalf of all affected dealers, which will satisfy any obligation on the part of individual dealers to file a breach notification with the FTC.

However, Massachusetts law requires any business that experiences a breach of the personal information of any Massachusetts resident to notify the affected customers and the Attorney General as soon as practicable following the discovery. Dealers will need to work with their counsel to prepare and submit a breach notice if and when they learn that the personal information of their Massachusetts customers has been unlawfully accessed.

Dealerships with cyber insurance in

place should review their claims reporting obligations under their policies. It is recommended that dealers notify their insurance providers as soon as possible and that they quantify and maintain proper documentation of the financial impact of the business interruption. Dealers also should review carefully their vendor contracts to determine their contractual obligations regarding data security and breach notification. These contracts may also address indemnification issues, liability limitations, and whether vendors are required to produce information to the dealer about actual or suspected breaches.

The CDK incident has highlighted the vulnerabilities dealers face when working with third parties for services. At a minimum, dealers should assess their current dependency on third party systems, make any necessary changes, and continue to invest in IT audits and cybersecurity programs. Additionally, it would be beneficial for dealers to seek advice from qualified experts to devise a long-term plan for data security and to establish their own breach protocols. This would require dealers to perform their own due diligence with retained experts and legal counsel.

The CDK cyber-attack is undoubtedly one of the worst attacks affecting dealers in recent memory. However, it serves as an important reminder that dealers should take a careful look at the systems that they are using and determine whether they are adequately protected in the case of a future cyber-attack. Dealers should perform their own due diligence and work with experts and their attorneys to come up with longterm data security and continuity plans to ensure that their businesses are protected. t

Tom Vangel, Jamie Radke, and Lindsey McComber, with the law firm of Murtha Cullina LLP in Boston, specialize in automotive law and can be reached at (617) 457-4072.

OSHA Proposes Heat Illness Regulation

By Hao Nguyen, Esq.

Senior Product and Regulatory Counsel, ComplyAuto

According to the Department of Health and Human Services, over 2,300 total heat-related deaths occurred in 2023, which is a number that has been steadily growing. In order to tackle this issue head on, OSHA recently issued a Notice of Proposed Rulemaking for rules regarding heat illness prevention in outdoor and indoor settings. To understand the complicated nature of heat illness at the federal level, we will need a short history lesson of how we got here.

Treating Heat Illness: OSHA’s General Duty Clause

It is hard to believe that prior to the NPRM there were no federal regulations specifically targeting heat illness, but that does not mean that heat related injuries and death were not on OSHA’s radar. OSHA has been using the General Duty Clause with surgical precision for situations like these.

This GDC power is much like Section 5 of the FTC Act, in that it is a broad grant of authority to target businesses/employers who subject their employees to unsafe working conditions. Specifically, the GDC states that each employer: “…shall furnish to each of his employees…a place of employment…[that is] free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.”

The GDC and its broad interpretation

have been both OSHA’s guide and guillotine for almost 55 years and have allowed it to penalize employers across multiple industries for infractions that jeopardize the health and safety of its employees. Heat illness is no different. Regardless of the presence of a final specific regulation, employers cannot subject their employees to unsafe working conditions, and this includes weather-related protections.

OSHA’s First Attempt: The National Emphasis Program

In 2022, OSHA established the National Emphasis Program related to indoor and outdoor heat-related illnesses and injuries. Viewed as a precursor for legislation by some, NEPs are a result of OSHA’s aggregation of copious amounts of injury and illness data and National Institute for Occupational Safety and Health reports to determine whether more emphasis is needed to be placed on a particular hazard.

Including the heat hazard, there are thirteen NEPs that cover many unrelated topics spanning from COVID-19 and crystalline silica to combustible dust and lead. OSHA found that the growing number of preventable heat-related injuries and illnesses necessitated an NEP. Since the heat NEP’s inception, OSHA has used it to conduct over 5,000 federal heat-related inspections and it remains effective until April 2025. If OSHA were to pass its heat illness prevention regulations, then it would become effective after this date.

“New Rule, Who ‘Dis?”

If finalized, the NPRM regulations would require businesses to implement measures throughout their operations to protect their employees from extreme heat in both indoor and outdoor applications. We are still months away, but here is a quick look at what these proposed regulations entail.

Application: Rather than saying which

businesses these regulations apply to, OSHA wrote in the alternative and identified the businesses/situations in which these regulations do not apply:

1. Work activities for which there is no reasonable expectation of exposure;

2. Short-duration employee exposures in any period between 15 minutes and 60 minutes;

3. Emergency response organizations (firefighting, medical services, technical search and rescue, or other specific emergency response activities);

4. Work activities performed in indoor work areas or vehicles where air-conditioning keeps the ambient temperature below 80 degrees Fahrenheit;

5. Telework; and

6. Sedentary work activities in indoor work areas that only involve sitting, occasional standing and walking, and occasional lifting of weights less than 10 pounds.

Heat Injury and Illness Prevention

Plan: Employers must develop and implement a work site heat injury and illness prevention plan with site-specific information, which, among other things, includes the following:

1. A comprehensive list of the types of work activities covered by the Plan;

2. All policies and procedures necessary to comply with these requirements; and

3. An identification of the heat index or some other metric the employee will monitor to comply with this regulation. The Plan must be evaluated for its effectiveness and updated either annually or whenever a heat-related illness or injury results in death, days away from work, medical treatment beyond first aid, or loss of consciousness, whichever occurs first. It also must be readily available at the work site to all employees and available in a language each employee understands.

Roles: The employer must designate one

or more heat safety coordinators to implement and monitor the Plan. Additionally, the employer must seek the input and involvement of non-managerial employees in the development and implementation of the Plan.

Responsibilities: The employer must regularly monitor heat conditions in outdoor work areas and, at indoor sites, must identify each work area where there is a reasonable expectation that employees are or may be exposed to heat at or above the initial heat trigger of 80 degrees Fahrenheit. Once the initial heat trigger is reached, the employer must implement controls, such as providing drinking water in specific locations, establishing break areas at outdoor and indoor work sites with adequate shade or air-conditioning, implementing rest breaks, and providing adequate cooling personal protection equipment. If employees are exposed to a high heat trigger (90 degrees Fahrenheit) then other requirements are necessary.

The employer must also establish heat

illness and emergency response procedures, which include a list of emergency phone numbers, contact information of designated individuals, descriptions of how to transport employees to places where they can be reached by emergency personnel, clear directions to the work site to be provided to emergency dispatchers, and procedures for responding to an employee experiencing signs and symptoms of heat-related illness.

As noted above, the OSHA proposal is just that – a proposal – so stay tuned. The details above could change from those proposed. Some form of a final rule is likely, so you should prepare now. ComplyAuto will continue to monitor this regulation and keep you posted on any significant changes.

Remember also that few states (California, Oregon, and others on the way) have their own heat illness-related regulations. California’s requirements are extensive, but ComplyAuto has you covered. In the coming days, we will offer the following to help you comply with these heat illness

prevention regulations:

• Heat Illness Prevention Plan

• Supervisor and Non-Supervisor Employee Heat Illness Training

• Temperature Measurement and Recordkeeping

• Cool-Down Area Questionnaires Conclusion

It is now more important than ever to stay on top of heat-related issues at your dealership. In addition to the state-specific resources outlined above, ComplyAuto currently has heat stress and heat-related injury and illness prevention training courses and heat illness prevention plans available to ensure a safe workplace environment. With the Summer season upon us, we highly encourage you to enroll your staff in these courses to help them understand the symptoms of heat stress (they are subtle!) and how to safely manage their activities when the heat turns up. If you have any questions, please reach out to us at info@complyauto.com.

Minimize Risk on Discrimination and Harassment Claims

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

The U.S. Equal Employment Opportunity Commission recently published its final guidance on harassment in the workplace. Some significant takeaways for employers are broad protections for LGBTQ+ workers; confirmation that workplace anti-bias laws cover pregnancy-related decisions; clarification on protection for religious expression; and confirmation that harassment can occur virtually. While the EEOC focused on harassment prevention, it made clear that workplace investigations matter now more than ever.

Prompt, thorough, and effective investigations can help employers in many ways, including with employee morale, retention, safety, and productivity. They also can help you minimize risk and, potentially, avoid liability for certain types of harassment. Accordingly, it is extremely important for employers to move quickly in the face of a discrimination or harassment complaint.

Employers in Massachusetts generally are responsible for any discrimination or harassment by their managers. That is not the case with respect to discrimination or harassment by coworkers: employers can avoid liability if they promptly investigate and, when warranted, take prompt, appropriate, remedial action. In either case, however, employers can reduce risk and cost by swift action and, candidly, can increase risk and cost by failing to do so.

The EEOC guidance explains that an investigation is “prompt” if it is conducted “reasonably soon” after an employee complains or the employer otherwise has notice of possible harassment. While whether an investigation is “prompt” will depend on the facts and circumstance in any given case, the guidance indicates opening an investigation (1) one day after a complaint is made is “prompt,” and (2) two months after a complaint is made, absent mitigating facts, likely is not. While that is a considerable gap, the inquiry may

center on the nature and severity of the alleged harassment and the reason for any delay. The EEOC explains, for example, when faced with allegations of a physical touching, an employer that does nothing for two weeks without explanation has not acted promptly. Best practice is not to delay without good reason and begin (and conduct) your investigation as expeditiously as possible, documenting all steps.

The EEOC guidance explains that an investigation is “adequate” if it is sufficiently thorough to “arrive at a reasonably fair estimate of truth.” While the investigation need not entail a “trial-type investigation,” it should be conducted by an impartial party and seek information about the conduct from all parties involved and/or who have relevant information. The guidance gives an example of an inadequate investigation, in which the investigator was a friend of the company supervisor, was unfamiliar with anti-discrimination laws, had no experience conducting harassment investigations, and, after some short interviews, issued a single-page memorandum concluding, without further explanation, there was “no basis for harassment.”

That said, there is no “one-size-fits-all” investigation process. Ultimately, the investigation should be conducted in a manner reflecting a genuine effort to fairly and impartially determine what conduct occurred, whether it violated company policy and, if so, what appropriate action should be taken. Investigators should be properly trained (or, at the very least, properly guided) and should use sound judgment under specific circumstances.

Prior guidance walked through some credibility factors investigators may consider in reviewing and assessing the evidence adduced through investigation. Is what an interviewee told the investigator believable on its face? Did he or she appear to be telling the truth or lying? Did he or she have a reason to lie? Are there cor-

roborating statements by others, or corroborating evidence? Did the alleged harasser have a history of similar behavior in the past? While the most recent EEOC guidance did not include these factors, they still stand as a decent guide for fact finders.

In terms of concluding harassment investigations, the guidance indicates you should inform the complainant and alleged harasser of your determination. Where appropriate, you should notify them that you will take appropriate action, subject to applicable privacy laws. This does not mean you should always tell the complainant about the specific corrective action taken; indeed, in most instances, you should not. At a minimum, however, you should tell the complainant whether his or her complaint was substantiated or not and, if so, that appropriate action will be taken.

Of course, good documentation is key. You should document the complaint, document your initial thoughts and investigation game plan (which you may modify during the investigation, depending on the evidence adduced), document each interview and all material evidence, document your decision making in a final report, and document any remedial action taken. The existence of such documentation candidly can make or break a case, so it is of vital importance that you properly document all steps and retain such documentation in a readily accessible file.

In sum, it is extremely important promptly and adequately to investigate any complaints of discrimination or harassment and take prompt, appropriate, remedial action if warranted. Candidly, it is the right thing to do, doing so can go a long way toward minimizing risk, and not doing so can go a long way toward compounding it. Best to seek appropriate guidance from competent counsel through the process as well.

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Your Point of Separation

By Tim Marbut

Ethos Group

There is much talk in our industry about being different; however, with twenty groups, consultants, trainers, and attrition, we all seem to drown in the sea of sameness. What does it mean to be truly different? We try with uniforms, coffee bars, or cafés. We are all striving to have something special to differentiate us from our competition.

When we really stop and think about it, our point of separation comes within three areas: our people, our products, and our processes. If we break each of these areas down, it is interesting concerning the original question – what is your point of separation?

When it comes to people, we seem to have a problem in this business. The average attrition rate for salespeople is still around ninety days. Reasons for this may be management, culture, or other salespeople. We cannot grow our business with a revolving door of new employees. We know customers buy from people they know and trust. Training a new group of employees every 90 days seems to be an exercise in futility.

The first way to eliminate turnover is to look for specific personality traits in our people. After analyzing the most successful salespeople in our client base, four behavior attributes stood out: proactivity, tenacity with knowledge, game-planning, and a positive attitude.

Proactivity

Proactivity is the catalyst for successful accomplishments. In athletics, our home life or business, whatever the endeavor, proactivity determines the outcome. The opposite behavior is reactivity, which is to-

tally dependent on another stimulus.

We found that successful salespeople are proactive in three areas: as an employee, a salesperson, and within their personal life. Proactive employees rarely must be managed. They consistently do things before being told to do them. Personal initiative takes over everyday actions. Proactive salespeople are always in control of their time with the customer. From asking questions to solving problems, they initiate the process. In our experience the best salespeople are proactively in charge of their personal life as well, including fitness, healthy eating, and personal growth.

Tenacity with Knowledge

Tenacity with knowledge is an interesting and important attribute. The art of selling is the ability to develop trust with the potential customer, to analyze their needs, to solve their problem, and to help them work through their decision. For a salesperson to consistently perform this task appropriately, they must be tenacious with personality, product, and process knowledge.

We often focus only on the selling process and expect our people to be bullet-proof within the steps to the sale (as if the steps alone sell the car). However, without understanding the four main personality traits of driver personality, analytic personality, amiable personality and expressive personality, and without a thorough product knowledge, how can we effectively communicate with our potential customer in a personal and unique way? The best salespeople also know the six areas of concern when it comes to value: safety, performance, appearance, comfort, economics, and dependability. Learning their product knowledge within these six areas allows for a more personal presentation of their product to the potential customer.

Game-planning

The idea that one can work toward and accomplish a goal without a game plan is a futile thought. There are so many distrac-

tions in a dealership on a daily basis. From personality differences and financial stress to the number of customers coming in at once, there is always something getting in the way of success. Without a plan of attack, we can be pulled in many directions. The best players stick to their well developed game plan. They are constantly looking at their progress: opportunities to do business, presentations, demos, follow-up calls, and outside appointments. All these areas must work synergistically to accomplish the end goal. Vincent Van Gough once said, “Great things are not done by impulse, but by a series of small things brought together.” This is the definition of game-planning.

Positive Attitude

Negativity is prevalent in every business; however, it seems to stand out in the automotive retail environment. A positive attitude is so important because it affects the element of trust with the potential customer - what they see, sense, and feel. It is contagious, and it is based on two simple principles: appreciation for what you have and expectation of something better happening with hard work. A positive attitude is a choice, and it is contagious. That is why the leadership within the organization should ask themselves, “What do my people see, sense, and feel from me today?”

Creating a point of separation in this current market climate is imperative to longterm success. Focusing on hiring the right personnel and developing them should be the cornerstone of your business. Selecting employees with these four attributes will enable you to build a foundation that can weather any economic environment, resulting in long-term growth.

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

Patrick Manzi NADA Senior Economist

New light-vehicle sales slipped in June in the wake of the CDK cyberattack that affected many dealers’ operations. Sales in June totaled a SAAR of 15.3 million units, down by 4.8% year over year and by 4% from May 2024. According to Wards Intelligence, the cyberattack cost the industry 50,000 unit sales in June 2024. (By July 2, most CDK customers had their service restored, the company says.) Sales missed in June are likely to be recouped in July, so July 2024’s SAAR will see a boost compared with pre-cyberattack expectations. The impact to June’s sales caused quarterly sales to decline for the first time since third-quarter 2022. Sales for Q2 2024 totaled 4.075 million units, down 0.4% from Q2 2023.

Through the first two quarters of the year, alternative-fuel vehicles represented 18.2% of all new vehicles sold. As of the end of the second quarter, conventional hybrid vehicles saw their market share increase by 2.3 percentage points year over year to 9.1%, as plug-in hybrid vehicles (PHEVs) increased their market share by 0.5 percentage points to 2.2%. Mean-

while, battery electric vehicles (BEVs) saw their market share slip by 0.2 percentage points to 6.9%. In terms of raw sales volume, hybrid and PHEV sales increased by 35.6% and 35.7%, respectively, year over year through the second quarter. Also, through the second quarter, BEV sales declined by 0.2% compared with Q2 2023.

At the end of June 2024, new light-vehicle inventory on the ground and in transit totaled 2.82 million units. June’s final inventory number is up 3.4% compared to May 2024 and is the highest level since November 2020’s 2.88 million units. Inventory should be relatively flat throughout the Summer months before increasing again in September and during the final months of the year. We expect inventory to approach 3 million units by year-end.

Looking at 2024 as a whole, we believe that new light-vehicle sales will rise by 2%-3% from 2023. Our forecast for total new light-vehicle sales in 2024 is 15.9 million units.

International Brands Make an Economic Impact

By Cody Lusk

President & CEO, American International Auto Dealers Association

In July, AIADA released its annual Economic Impact Report in conjunction with the manufacturer’s advocacy group Autos Drive America. Every year, we collect and organize the manufacturing, trade, and sales data our industry generates in order to draw a comprehensive picture of the positive impact international nameplate brands and retailers have on the American economy. This report shows, in painstaking detail, just how deeply AIADA’s members are invested in our economy and our communities.

As political campaigning heats up this Summer and candidates from both sides of the aisle take aim at your brands and stores, it is my hope that this report reaches a larger audience than ever before. Voters need to be reminded that, for our economy to grow and for the goods they want to remain available and affordable, we need LESS, not more government interference. International nameplate dealers deserve a level playing field on which to compete. The more our government interferes with the auto industry, seeks to regulate our products, and limits trade with our allies, the more regular Americans suffer. Buying a car is a big deal, and Americans should not have D.C. bureaucrats limiting their options.

In this international era of business competition, withdrawing from the global marketplace would spell economic disaster for all Americans. Just as American consumers want a broad selection of choices and prices offered by our trading

In this international era of business competition, withdrawing from the global marketplace would spell economic disaster for all Americans.

partners, American businesses need trade in order access to the consumers in those countries. After all, about ¾ of the world’s purchasing power and over 95 percent of the world’s consumers reside outside of America’s borders.

To put it bluntly, without trade our economy is dead in the water.

As of today, international auto manufacturers have built 31 manufacturing facilities in 13 states with 156,000 American employees building and designing 90 different vehicles. In every state, in nearly every Congressional district, 9,400+ international nameplate dealerships sold 8.7 million vehicles last year. Those stores are economic engines for the cities, towns, and country they serve –producing vital tax revenue and hundreds of thousands of stable, well compensated career positions.

A few additional highlights:

• International nameplate auto dealerships represent a $48 billion national payroll and more than half of all dealership em-

ployment in the U.S.

• In 2023, they pumped $4.4 billion in advertising dollars into the national economy and sold $71 billion in parts and services to American consumers.

• International automotive manufacturers are leading the effort to develop clean technologies, selling 1.8 million green vehicles in 2023 – 60% of the green market share.

• International automakers last year exported 762,000 U.S.-built vehicles worth $24 billion to more than 130 different countries.

These numbers may speak for themselves, but dealers are uniquely positioned to share this information and amp up the volume. Visit AIADA.org/report to read and spread our 2024 report far and wide: with your employees, your customers, your fellow dealers, and your elected officials. There are times when numbers are more powerful than words, and these numbers deserve to be heard.

By Scott Pearson Chairman, American Truck Dealers

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U.S. House Passes Bill to Stop EPA’s De Facto EV Mandates

At our recent ATD Fly-In to Washington, D.C., in late June, a top priority for our discussions with our Members of Congress was pushing back on federal truck emissions mandates and educating key decisionmakers on their detrimental impact on our industry. As I wrote in last month’s column, broad adoption of heavy-duty and medium-duty zero emission vehicles (ZEVs) are far from reality. The technology does not yet meet the needs of our customers, and commercial ZEVs are mostly unavailable. EPA’s de facto electric vehicle mandate puts the health of the trucking industry, our economy, and the supply chain at risk.

At our Fly-In, Rep. Randy Feenstra (R-Iowa), a champion for our issues, joined us to discuss strategy for sharing the realities of the rule: the forced adoption of ZEVs, despite these vehicles currently being 0.3% of sales last year and costing two to three times more than comparable diesel vehicles, is extremely problematic. This regulation goes too far too fast, and we need relief. Rep. Feenstra led 157 Members of Congress in a bicameral letter to the EPA explaining the impact of the rule on small business and the economy and urging the agency to withdraw it.

Our work has seen results. On July 24, the U.S. House of Representatives voted to pass the House Interior, Environment and Related Agencies appropriations bill for Fiscal Year 2025, which includes language (Secs. 474 and 475) that would temporarily stop the EPA from spending funds to implement, administer, or enforce its de facto EV mandates on light-duty, medium-duty, and heavy-duty vehicles. This bill passed the House by a vote of 210-205. Prior to the vote, NADA President and CEO Mike Stanton and ATD President Laura Perrotta sent a letter to House members in support of this bill.

NADA and ATD are highly skeptical that EVs will be adopted anywhere near the levels required to comply with the EPA’s rules. While dealers have supported the move to electrification with billions of dollars in investments and the purchase of EV inventory, the U.S. lacks an adequate national consumer and commercial vehicle charging network, which makes the rapid adoption of EVs required by the EPA impractical.

I want to thank all our member dealers as well

as the state ATAEs who have chimed in with their Members of Congress on this issue. Our efforts face a steeper climb in the Democrat-controlled Senate. The fate of the EV riders in the House funding legislation is uncertain, as the spending bill will need to be negotiated with the Senate, likely in the lame duck session of Congress. NADA will continue efforts to temporarily stop or disapprove of EPA’s de facto EV mandates. I encourage you all to remind your elected officials of the negative, unintended consequences to dealers and consumers alike of this rule.

ATD Show 2025 Registration & Housing Now Open!

Mark your calendars and get ready to head down to the Big Easy! Registration and housing for ATD Show 2025 is officially open. Join us in New Orleans, January 23-25, for an unforgettable experience packed with industry insights, networking opportunities and the legendary NOLA charm.

Whether you are a dealer, manager, OEM representative, or industry affiliate, ATD Show is the place to forge new alliances, strengthen existing partnerships, and engage in thought-provoking discussions that will reshape your business strategies and reinvigorate the truck industry.

New Orleans provides the ideal setting for both the ATD Show and NADA Show. And only ATD Show registrants get access to it all! Get ready to immerse yourself in the city’s vibrant culture, indulge in world-class cuisine, and experience the legendary Southern hospitality! NADA Fest promises to be an evening filled with the infectious fun and flair for which New Orleans is famous!

ATD Show 2025 will be held at the Hilton New Orleans Riverside. But we’ve partnered with 45 hotels across three distinct neighborhoods to ensure you find the perfect accommodation for your needs and preferences.

• Warehouse/Arts District: Immerse yourself in this sophisticated and trendy neighborhood that boasts award-winning dining and stylish boutiques, as well as museums and art galleries.

• Central Business District: This bustling hub offers a vibrant mix of cultural attractions, trendy restaurants and convenient access to other areas.

tru CK C orner

• French Quarter: Experience the iconic charm of New Orleans in its most famous neighborhood. Explore world-famous Bourbon Street and soak up the bohemian atmosphere.

Don’t Miss Out! Register Today! Head over to www.ATDshow. org to secure your spot and book your hotel stay. We can’t wait to see you in New Orleans!

ATD Truck Beat: Q2 2024 Commercial Truck Sales Down 8% from 2023

By Patrick Manzi, NADA Chief Economist

New commercial truck sales reached 231,743 through the second quarter of 2024, down 8% year-over-year. Class 8 truck sales were the primary driver of the decline in the overall market. Halfway through 2024, Class 8 truck sales totaled 136,096, a decline of 16.6% compared to the first half of 2023. Class 8 truck sales have declined year-over-year for 11 straight months. Medium-duty truck sales posted a 2.0% gain year-over-year through the second quarter with only Class 6 sales posting a year-over-year decline.

Class 8 truck orders declined at the end of the second quarter. According to ACT Research, preliminary estimates of orders for new Class 8 trucks in June 2024 totaled 14,800 units, down 12% year-over-year and 37% from May 2024. Class 8 truck orders were stronger at the start of the year but have declined in recent months. Orders for Class 5-7 trucks totaled an estimated 19,000 units in June 2024, down 1.6% compared to May 2024, but up by 3.3% year-over-year.

Used Class 8 truck pricing has cooled significantly over the past two years as new truck production recovered. According to ACT Research, the average retail price for a used Class 8 truck in May 2024 was $58,400, a decline of 15% year-over-year. ACT’s team expects used truck pricing to be stable through the fall.

In our last update we reported that we expected the Fed to make its first rate cut in June. June has passed and the Fed chose to hold rates steady given the strength of the labor market and broader economy and inflation readings coming in higher than expected in the months leading up to the meeting. A cut at the July meeting is unlikely and we expect the first rate cut of the current cycle to come in one of the final three meetings of the year. Any relief on borrowing costs would be helpful to new truck buyers. Looking out to the end of 2024, we expect that medium-duty sales will increase compared to 2023 to roughly 252,000 units and that heavy-duty truck sales will decline to around 225,000 units.

Chevron Deference Is Gone. What Does That Mean For Trucking?

By Jeremy Wolfe, Editor, FleetOwner

A world without Chevron deference empowers courts to ignore agencies’ interpretations of their own statutory authority, bringing new vulnerability to emissions regulations, FMCSA rulemaking, and more.

The Supreme Court in June overruled Chevron deference, a major legal doctrine that articulated federal agencies’ ability to interpret the law. This raises the question of whether agency policies, like some emissions regulations, will still be supported by the judicial system. But is this a big deal for the trucking industry?

“Some have argued it’s not a big deal because courts have been working to interpret statutes to find there is no ambiguity in the first instance (in which case, Chevron did not apply),” Prasad Sharma, partner at Scopelitis and general counsel for the Truckload Carriers Association, told FleetOwner. “They point to the fact that the Supreme Court has not relied on Chevron to decide a case of late.

“However, it’s a longstanding precedent that was largely followed by the lower courts, so it is a big deal. It will shift power from agencies to the judiciary and heighten the importance of Congress legislating with clarity to address issues that arise in the modern world.”

The end of Chevron deference represents a significant shift in interpretive power. With it comes a new possibility for courts to block major agency rulemakings from the EPA, FMCSA, and others.

What was Chevron deference?

Chevron deference is a legal doctrine suggest-

ing that, when a law concerning a federal agency is ambiguous, federal courts should defer to the agency’s interpretation of the law.

According to Cornell Law School, the doctrine came from the 1984 case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., where the Supreme Court articulated its opinion on deferring to agencies for interpretations. This deference was appropriate under two conditions: when Congress had not spoken directly to the precise issue in question, and when the agency charged with executing the law held a reasonable interpretation.

“Chevron was a case that led to a judicial doctrine that when an agency is promulgating a substantive rule (one with legal effect) under the Administrative Procedures Act and there is some ambiguity in the authorizing statute enacted by Congress, courts should defer to an agency’s interpretation of the statute so long as it is reasonable,” Prasad Sharma, partner at Scopelitis and general counsel for the Truckload Carriers Association, told FleetOwner. “This meant that a court should accept the agency’s interpretation even if there were other possible reasonable alternative interpretations.”

arise when Congress addresses an issue, agencies will have less latitude to carry out their views/preferences. On the other hand, some would argue that agencies were, under Chevron, exercising authority they never really should have had.”

What does this mean for trucking?

Judges received a newfound freedom to strike down major agency rulemakings. For trucking, relevant agency rules now have a new vulnerability in the court system.

“The reversal of Chevron is relevant to all agency rulemaking subject to the APA,” Sharma said. “For commercial transportation, that means substantive rules out of FMCSA, NHTSA, EPA, FHWA, among other agencies.”

This could include EPA emissions regulations, carriers’ Compliance, Safety, and Accountability scores, and more.

Courts may still consider the views of an agency and give it weight based on how long the agency has consistently held the view, the thoroughness of the agency’s consideration, and the validity of its reasoning.

Chevron deference was a major part of administrative law for the last 40 years. It lent significant support to agencies’ rulemakings, such as EPA’s emissions regulations, for decades.

Chevron deference shot down

In June, the Supreme Court overruled the 1984 Chevron ruling in the case Loper Bright Enterprises v. Raimondo.

“The Supreme Court overturned the Chevron precedent, indicating it was inconsistent with the separation of powers under the Constitution, which assigns interpretation of the law to the judiciary,” Sharma said.

The decision shifts the power dynamic between the judiciary and federal agencies. Courts are no longer required to follow an agency’s reasonable interpretation of a relevant law.

“Going forward, courts are to do the work of interpreting statutes enacted by Congress using the tools available to courts,” Sharma said. “Courts may still consider the views of an agency and give it weight based on how long the agency has consistently held the view, the thoroughness of the agency’s consideration, and the validity of its reasoning. However, the courts no longer have to defer to the agency’s interpretation.”

This reduces agencies’ influence in defending against legal challenges.

“To the extent that an agency is filling gaps left unaddressed in a statute or interpreting an ambiguity, the agency will not enjoy deference but will, like other litigants, have to use its power to persuade,” Sharma said. “Because Congress is often unable to legislate with clarity on the wide range of potential questions that

“It could be any number of statutes that have left gaps or ambiguities (arguably, nearly every statute),” Sharma said. “One area getting interest is the transition to zero-emission vehicles in California under the Clean Air Act and EPA’s construction of its waiver authority.”

EPA-granted waivers allow the California Air Resources Board to set its own emissions regulations. The Clean Air Act permits the EPA to grant California waivers to set its own emissions standards. This helped CARB develop zero-emissions vehicle mandates under its Advanced Clean Trucks regulation.

Legal challenges currently surround EPA’s authority to grant the waiver for ACT, in part because the agency cannot set its own EV mandate, as Julia Stein writes in Legal Planet. According to Stein, a world without Chevron deference means that reviewing courts have greater power to ignore EPA’s own interpretation of its waiver-granting authority—an existential threat to the California ZEV mandate.

“Moreover, in combination with the Court’s revival of the major questions doctrine, rulemaking with impacts on broad swaths of the economy will be under heightened scrutiny,” Sharma told FleetOwner.

The major questions doctrine became most relevant after the Supreme Court’s 2022 decision in West Virginia v. Environmental Protection Agency. According to this doctrine, courts should hesitate to assume agencies have the independent authority to make actions of economic or political significance without explicit Congressional approval.

The major questions doctrine and judges’ newly expanded authority to interpret law illustrate a shift in power away from federal agencies. Agency rulemaking has new vulnerabilities in the judicial system. Agencies hoping to make grand changes to the trucking industry could face new, critical setbacks in court.

Campaign Season’s Surprising Twists and Turns

Scott Dube, Partner at McGovern

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naDa’S MaSSacHuSettS MeMberS on tHe naDa boarD of DirectorS

He can be reacHeD at SDube@ McGovernauto.coM.

We are now within 100 days of Election Day, and, I must say, we have experienced probably the most volatile presidential campaign season that I can recall in my lifetime. What started off as a rematch of the 2020 election as former President Donal Trump attempts to return to the White House, his current opponent, President Joseph Biden, soon became his ex-opponent.

In the span of a couple weeks, we saw the Republican Trump survive a shocking assassination attempt seen by millions on a Saturday afternoon on live TV. Two days later, Mr. Trump was at the Milwaukee arena with his bandaged right ear after a near-fatal headshot at a rally in western Pennsylvania, getting ready for the start of the GOP nominating convention, which included his unveiling of J.D. Vance, a first-term senator from Ohio, as his vice president pick.

Within days of the completion of Milwaukee’s festivities, we saw President Biden cede his position as the Democrat’s nominee to Vice President Kamala Harris, with enough behind-the-scenes palace intrigue the facts to which we will await the books to be written. In the immediate Harris honeymoon from Democrat party officials and the media, the vice president seemed to have erased much of the lead the former president held over Mr. Biden and heads to the Democrat’s August convention in Chicago as her party’s presumptive nominee. Pundits and voters are braced for a combative race that will most likely, as it appears now, be decided at the Electoral College by a handful of toss-up states.

Below this top electoral layer, we have House and Senate races, all 435 in the former and 34 in the latter, that will decide who will control Congress, which is already tightly split between the parties. Pre-election analyses from the pundits suggest control will come down to the outcome in 2030 House seats and several Senate seats, especially where a number of vulnerable Democrat incumbents reside in currently Republican states.

There is much on the line, therefore, as we Americans head to the polls on November 5 (or cast ballots via early voting) to decide whose agenda will take over beginning in January 2025. As Main Street businesses, we are keen to know the winners; the legislative and regulatory environments under which we operate can directly affect our ability to thrive as an economic engine for our employees and communities.

Your Massachusetts team will be in the Nation’s capital in mid-September for NADA’s annual Washington Conference, where we will discuss issues important to our dealership operations with our Members of Congress. Although it is unclear what can get accomplished in the remaining months of a legislative calendar with a politically split Congress and a lame-duck president, one must always be diligent to the issues at hand and spread our message accordingly.

As always, feel free to contact me should you have any questions or want to get involved with the members of our Congressional delegation.

A Message from NADA Chairman Gary Gilchrist

Fellow Dealers and ATAEs,

Auto dealers have a rich history of innovating. Technology changes, and we embrace those changes to serve consumers. The economy rises and falls, and we evolve to keep our businesses strong. And now, as we face challenges from all directions, we will meet those challenges and thrive, so that we can continue to sell and service the vehicles our customers want and need.

First, an issue that is front and center for many of your businesses: the cyber incident that shut down CDK’s dealers’ systems. I do not need to emphasize the impact this has had on auto retailers across the country. This is a forceful reminder to the automotive retail industry – including dealers, ATAEs and the vendors we work with – to remain vigilant and proactive in the protection of our data. NADA has numerous resources for strengthening compliance in data protection, including the recently updated NADA Safeguards Driven Guide.

While dealers work to manage these challenges, one positive development is the FTC’s recent acceptance of NADA’s proposal – made in coordination with CDK – to allow CDK to file a consolidated breach notification with the FTC on behalf of its dealer clients if CDK determines that this new federal notification requirement has been triggered. While dealers still must contend with state breach notification requirements, as explained in a recent NADA all member e-mail, dealers

now have no obligation to file a breach notification with the FTC related to this matter.

Next, most of you are well-informed about NADA’s strong opposition to the Federal Trade Commission’s (FTC) Vehicle Shopping Rule (VSR), which was finalized in December 2023. NADA is actively challenging the onerous VSR on multiple fronts and we have progress to report. NADA commissioned an updated study from the Center for Automotive Research, which found that the final VSR will require at least an additional hour to complete the vehicle purchasing process and generate a net cost to consumers and dealers of $24.1 billion over 10 years.

Armed with this information, NADA has been able to push a provision in the House Financial Services and General Government appropriations funding bill for Fiscal Year 2025, which would stop the FTC from implementing or enforcing the VSR until September 30, 2025. This bill passed the House Appropriations Committee and is scheduled to be considered on the House floor at the end of July. (See following item regarding the House vote.)

Meanwhile, NADA and the Texas Automobile Dealers Association continue to challenge the rule in the U.S. Court of Appeals for the 5th Circuit. Our arguments here are that the FTC failed to follow its own rules when it issued the rule, the record it assembled does not support the rule’s new mandates, and the FTC failed to adequately consider the rule’s costs and benefits to consumers and dealers. The case will be assigned to a three-judge panel, and oral arguments could begin as soon as September.

Since the rule’s announcement, it has been unclear whether the VSR applies to commercial truck dealers, as they are not mentioned in the text of the rule. After six months and a congressional inquiry, the FTC stated that the rule does cover commercial truck dealers, despite the FTC’s failure to perform any cost-benefit analysis on commercial truck retailers. This is just one example of how the FTC does not understand the full reach and impact of its own rule. NADA is pursuing additional clarification from the FTC on the matter.

Finally, I’ll turn to the emissions regulations, which are now coming from two regulatory bodies: the Environmental Protection Agency (EPA), through its final greenhouse gas rule released in March, and the National Highway Traffic Safety Administration (NHSTA), through its final Corporate Average Fuel Economy (CAFE) standards released in June. These rules align along the same percentages for zero-emissions new vehicles that will need to be sold from 2027 through 2032.

I emphasize sold as the key word. Not developed, not advertised, not even manufactured. Sold.

A vehicle sold requires a customer, which is how we are approaching these regulations – through the eyes of the consumers we work with every day. NADA’s position is that these

rules are far ahead of the market and consumer demand.

While dealers have supported the move to electrification with billions of dollars in investments and the purchase of EV inventory, the requirements must be achievable. The charging infrastructure is not ready, the current incentives are not sufficient and high EV prices will price out millions of consumers – particularly low-income Americans – from the new car market.

While near term improvements were made to the proposed greenhouse gas rule due to the efforts of NADA and thousands of our dealer members, NADA urges the administration to track actual EV sales – not projections or estimates – and to make necessary adjustments to its requirements to reflect actual consumer demand.

NADA has supported joint resolutions as part of the Congressional Review Act to disapprove of the final EPA rule and stop it. We will support similar measures disapproving the NHTSA CAFE rule.

Through my Spring residency in Tysons, I have been able to see the NADA staff in action and I can assure you that they, with the support of the NADA directors and members, have been diligently working on each of these priorities and many more issues. My job is to remind everyone that we will accomplish so much more when we are aligned in our position and message.

That means we need your voice and your help in promoting and sharing that message. Support the hard work of your ATAEs. Stay in touch with your Members of Congress and Directors. And utilize the many valuable resources included in your NADA membership.

Remember – we have faced challenges before. NADA is here to help you grow and succeed into the future.

Many thanks,

Gary Gilchrist 2024 NADA Chairman

U.S. House Passes Bill to Stop EPA’s De Facto EV Mandates

On July 24, the U.S. House of Representatives voted to pass the House Interior, Environment and Related Agencies appropriations bill for Fiscal Year 2025, which includes language (Secs. 474 and 475) that would temporarily stop the EPA from spending funds to implement, administer, or enforce its de facto EV mandates on light-duty, medium-duty, and heavy-duty vehicles. This bill passed the House by a vote of 210-205. Prior to the vote, NADA President and CEO Mike Stanton and ATD President Laura Perrotta sent a letter to House members in support of this bill.

NADA and ATD are highly skeptical that EVs will be adopted anywhere near the levels required to comply with the EPA’s rules. While dealers have supported the move to electrification with billions of dollars in investments and the purchase of EV

inventory, the U.S. lacks an adequate national consumer and commercial vehicle charging network, which makes the rapid adoption of EVs required by the EPA impractical.

The fate of the EV riders in the House funding legislation is uncertain, as the spending bill will need to be negotiated with the Senate, likely in the lame duck session of Congress. NADA will continue efforts to temporarily stop or disapprove of EPA’s de facto EV mandates.

CrowdStrike Outage Aftermath – Urgent Action Required

In the wake of the recent global CrowdStrike outage, cybercriminals are seizing the opportunity to target automotive dealerships with sophisticated phishing attacks. Bad actors are crafting counterfeit domains that mimic CrowdStrike’s, deceiving dealers into believing they are in communication with CrowdStrike corporate.

The danger lies in the simplicity of the deception—it only takes one employee misled by these fraudulent communications to open the door to malware. Successful breaches can lead to ransomware attacks that seize control of dealership systems, denying access until a ransom is paid.

Black Breach, a cybersecurity firm specializing in the automotive dealership industry, recommends dealership IT resources to promptly block these identified counterfeit domains, whether or not they are current users of CrowdStrike services.

For a detailed breakdown of this attack, an example of a CrowdStrike phishing attack already identified, and to access an updated copy-and-paste list of the known fraudulent domains, go to www.blackbreach.com/blog/.

Women Driving Auto Retail – Becoming the Car Fairy

By Catherine York, Manager, Communications, at NADA

Nearly eight years ago, Crissy Burton, a single mother of two young children, walked into a Nissan dealership with a credit score below 400 and little hope of getting financing for a car. A few hours later, she drove out with a new Nissan Altima and the beginnings of a new career.

Now she is a nationally-renowned auto sales leader – best known as Crissy the Car Fairy – who sells up to 73 cars a month.

It all started after a positive experience at Ed Martin Nissan of Fishers in Indiana, where a dedicated salesperson got Burton the financing she needed to get her dream car, which she proudly named Cherry. After posting about her positive experience on social media, Burton sent five new customers toward the salesperson.

In return, he called Burton back into the dealership for a referral check. When she arrived, he introduced her to the sales managers. This time, she left the dealership with a job.

With no automotive experience, Burton started as a sales assistant, scheduling appointments and following up with customers. At the time, she was working as an underwriter at a mortgage company and getting out from behind a desk excited her. In her first week she helped sell 13 cars. Not long after, she was promoted to salesperson and quickly became a top performer.

Burton has a natural gift of customer service and excels in building relationships. In fact, she prefers to think of herself as a customer relations professional, not a salesperson. She specializes in customers with subprime credit and spends the same energy and resources on each of them as the salesperson who introduced her to the business.

“People come to me with interesting situations,” Burton said. “If I can help them, I’m going to go hard to help them. If I can’t, I’m going to give them a blueprint to figure it out.”

That is how Burton became the Car Fairy, a name given to her by a customer who called Burton’s hard work and customer service “magic.”

She develops long-term relationships with her customers and their families. One family has bought eight cars from her in three years. The father of the family bought the first while going through personal bankruptcy. Through his vehicle financing, he was able to rebuild his credit. Three years later, he has been able to buy a house and a new Chevrolet Silverado. Burton also sold vehicles to his wife and two children.

She said it’s not unusual for her to become the appointed salesperson for an entire family.

“I have genuine passion for this,” Burton said. “I’m helping people and being rewarded for it.”

That reward has changed her family’s life. Despite the positive experience Burton has had, she is not surprised that women remain underrepresented in automotive retail. Her solution – more mentorship. She thinks the turnover she witnesses in young female employees can be prevented if they are offered more support and mentorship from their colleagues and managers.

Burton has stayed in touch with the salesperson who sold her the Nissan Altima eight years ago, even after she moved dealerships. He has become her mentor and best friend and has provided support and advice when she has had career challenges.

This, Burton said, is proof that men can be mentors to women – they just need to step up. Burton is stepping up, too. Through her social media presence, she has built an online community of women in automotive retail, where she becomes their virtual mentor and counselor.

Burton is proud of her consistently high rankings in national sales, but at the end of the day, everything comes back to the customer for her. “If I sell one car this month, I’m still number one,” she said. “Because I impacted someone’s life.”