Dealership Development, LLC Blog

Automotive compliance is a huge issue for car dealerships because you need to stay on top of what the government requires for your business. But it can be stressful and even overwhelming to deal with on your own. That’s why we at Dealership Development don’t want you to do it alone! We are here for you and we can walk you through automotive compliance every step of the way.

Federal regulation compliance in 2012 cost the average franchised auto dealership their earnings from a sale of 106 vehicles, representing more than 21% of the dealership’s before-tax net profits. 

According to a report by the non-profit Center for Automotive Research (CAR), the major portion of this cost is due to regulations related to vehicle loans, employment, and bookkeeping. Compliance with repair, marketing, sales, and business operations regulations was responsible for the remainder of this enormous cost. Given the increase in regulations since 2012 and the additional price of meeting state and local regulations, it’s clear that a significant difference to dealership’s earnings will result from improving compliance efforts. Automotive compliance is a complicated and time-consuming effort requiring ongoing research, training, and auditing.

Did you know, when it comes to a compliance fine, any chief officer can be fined individually? And the fines are not just issued for leaving physical papers unattended anymore. The advent of car-shopping websites and mobile apps have increased the need for dealer awareness and responsibility in avoiding stolen personal information from online sources.

"If you have a piece of customer information that is not safeguarded properly, there's a (noncompliance) fine of $40,000 per day," says Matt Woods, director for field operations at an Austin, Texas dealership consultancy service group in a recent report from Automotive News. What does this mean? That one unlocked cabinet in an unattended office could result in astronomical fines—one for every file. Not only does this lack of security result in fines, it also manifests as loss of customer’s trust and loyalty as well as possible lawsuits.

Throughout 2016 we found BIG improvements amongst our clients who are keeping up with the ever growing list of strict government regulations that are put on car dealers today.  From installing safeguarding policies to regular auditing and training, these dealers are finding that not only are they keeping themselves and consumers’ safe from thieves looking to steal their confidential private information, they are turning a profit by enforcing compliance in their finance department, one example of this is through proper menu use, presenting the menu to every customer, 100% of the time.

The FTC recently approved a round of final changes to the Used Car Rule that all used car dealers should be aware of and familiar with. This rule, formerly known as the Used Motor Vehicle Trade Regulation Rule says that all car dealers must have a window sticker on any used car offered for sale.