JULY 16, 2008

IN THIS ISSUE

DEALER NEWS & INFORMATION

– Section 125 Cafeteria Plans

– NADA Dealer Attitude Survey Goes Online

– Automotive News at a Glance

PUBLIC POLICY UPDATES

– NADA Coverage on Blue Laws in Rhode Island

REGULATORY & LEGAL UPDATES

– IRS Increases Mileage Rates Through
Dec. 31, 2008

– Summary of 2008 Updates from the IRS

UPCOMING SEMINARS

– NEXT WEEK: F&I Compliance Training

– *New* Red Flags Rule & Privacy/ Safeguards Re-cap

– Safety Compliance Seminar

– Lifeline to Profits Seminar

– Salesperson Training/Personal Development

CALENDAR OF EVENTS
– Upcoming Events

– State Fleet Purchasing Meeting
– Fall 2008 Regional Member Briefings

DEALER MILESTONES,
HIGHLIGHTS & TRANSITIONS

– Share YOUR Accomplishments

ARCHIVES

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& Legal Articles from the Open
Road e-newsletter.

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& Legal Articles from the Open
Road e-newsletter.

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Outlook archives.

ONLINE REGISTRATION

CLICK HERE to register online
for various CADA seminars & events.

MEMBERSHIP RESOURCES

CLICK HERE for details on the
Speaker and Educational
Resources.

CLICK HERE for a list of current
Endorsed Vendors/Programs.

CLICK HERE for a list of current
Allied Members.

CLICK HERE for an order form for
CADA forms.

CLICK HERE for information on all member services.

www.nada.org

CLICK HERE for NADA
Regulatory Affairs information.

STATE GOVERNMENT RESOURCES

CLICK HERE for the Auto Industry
Division of the Colorado Dept.
of Revenue.

CLICK HERE for the Title and
Registration section of the
Colorado Dept. of Revenue,
Motor Vehicles Division.

CLICK HERE for the Colorado
Department of Labor &
Employment website.

Visit us at www.coloradodealers.org.

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Friday, 7 a.m. to 4 p.m.

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nancy.burke@coloradodealers.org

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ENDORSED VENDOR/PROGRAMS

CLICK HERE for information about the
Endorsed Vendors/Programs.

If you have trouble viewing any of the links or documents in this e-newsletter, please CLICK HERE to access the web-based version.

Even though you are likely to find someone working at the William D. Barrow building for CADA members almost any time, official hours are designed to meet the needs of member dealers:

7 a.m. to 5 p.m., Monday to Thursday 7 a.m. to 4 p.m., Friday

And any other time you can usually catch someone working before or after normal hours to benefit dealers and the priorities you need. CALL US!

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SECTION 125 CAFETERIA PLANS

Do you know the changes the New Proposed Section 125 Regulations introduced in August 2007 contain? If you attended the Section 125 seminars held on May 14 and 15 by American Fidelity Assurance Company, you do. The seminars reiterated the need for continued review of the IRS regulations in Cafeteria Plan documents. It’s a lot to keep up with. Some rules have been restated and others added and/or clarified. Listed below is a recap of the main topics in the seminars:

• New Proposed Regulations contain five sections not previously finalized
• Qualified benefits under a Section 125 plan
• Who can sponsor and who can participate in the Section 125 Cafeteria plan
• specifically - Sub S Corporations
• Section 125 elections
• when and how
• Qualified mid-year election changes
• Non-Discrimination testing
• the new definition of Key Employees and Highly Compensated Employees
• IRS requirements for testing date
• Flexible Spending Accounts rules and definitions
• the employers Uniform Coverage Risk
• grace period
• forfeitures
• The IRS does audit cafeteria plans
• Mergers & acquisitions
  

The number one requirement is your Section 125 plan document must be in writing. If there is no written cafeteria plan, or if the written plan fails to satisfy any of the requirements, the plan is not a cafeteria plan and an employee’s election between taxable and nontaxable benefits results in gross income to the employee (1.125-1 (c)(6)). If the cafeteria plan fails to operate according to its written plan or otherwise fails to operate in compliance with Section 125 and the regulations, the plan is not a cafeteria plan and employees’ elections between taxable and nontaxable benefits result in gross income to the employees (1.125-1 (c) (7)).

This is only one of the requirements discussed in the seminars. If you would like additional information or a review of your Section 125 plan document conducted by an American Fidelity salaried account representative, contact us at 1-877-967-5748 ext. 7.

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NADA DEALER ATTITUDE SURVEY GOES ONLINE

The NADA Dealer Attitude Survey (DAS) is now going to be collected and managed exclusively on line. Under the new system, NADA will no longer mail paper surveys to dealers. The move to online-only will significantly speed up survey processing time and allow NADA Industry Relations to report the results of face-to-face DAS meetings with manufacturers back to the dealers who completed the survey.

“The online-only methodology allows us to provide important and timely information to dealers in a manner that previously was not possible” noted Michael Regan, NADA’s VP of Industry Affairs. 

NADA has designed a new full-service DAS website at www.nadasurvey.com to facilitate the move to online-only. CLICK HERE for more details.

* * * * * * * *

AUTOMOTIVE NEWS AT A GLANCE

Listed here are several articles pertaining to the auto industry in general that appeared recently in newspapers and other media outlets across the nation.

• Oil down more than $1 a barrel on stronger dollar
  The Detroit News, July 14
  Oil prices fell Monday as the dollar rose on expectations U.S. moves to shore up two ailing mortgage financiers will help avert a worsening of the credit crisis.
  
  
• Auto Dealers Add Own Sales Incentives, Deepening Their Losses on Trucks, SUVs
  The Wall Street Journal, July 14
  Some car dealers are reaching deep into their own pockets to extend auto makers' already hefty rebates and other incentives to sell pickup trucks and sports-utility vehicles.
  
  
• Gas Prices Spur Drivers to Cut Use to Five-Year Low
  The Wall Street Journal, July 10
  As average gas prices hit a record high of $4.108 a gallon this week, the government released new data showing that drivers have cut back their use of the fuel to levels not seen in five years.
  
  
• Wagoner Says GM Won't File For Bankruptcy or Reduce Brands
  The Wall Street Journal, July 11
  General Motors Corp. Chief Executive Rick Wagoner dismissed the notion that the auto maker may soon file for bankruptcy, and he also said the company has no plans to sell or shutter more of its brands.
  
  
• Chrysler plans electric vehicles, Could be ready in 3-5 years
  The Free Press, July 11
  Chrysler LLC's answer to the much-anticipated Chevrolet Volt could be three to five years away, the Free Press has learned.

  The Auburn Hills automaker launched a special division within the company last fall called ENVI -- pronounced like "envy" -- to bring electric-drive vehicles and related advanced-propulsion technologies to market.

• Rating the hybrids: A look at the best and worst, and what's coming next
  The Detroit News, July 9
  There are two reasons to buy a hybrid: better gas mileage and environmental concerns.

  Mother Earth may hope for the latter, but the overwhelming reason most drivers want to buy a gas-electric hybrid is to use less gas, especially with prices at the pump staying above $4 a gallon. For the most part, hybrids will carry you farther and use less fuel than their gas-only counterparts. But they do cost more.

• GM, Ford should merge, says veteran auto dealer
  Buffalo Business First, July 11
  Over the decades, Culligan, 77, watched the U.S. auto industry evolve from a monopolistic force in the world to what it is today - threatened and intimidated by foreign rivals, and seemingly lost in its direction.

  Culligan, who sold his Pontiac and GMC Truck franchises two weeks ago, said a drastic overhaul is needed for his old company and the industry to rebound and survive.

• Worth the risk? Debate on offshore drilling heats up
  USA Today, July 13
  From his perch at the southern tip of Louisiana, port director Ted Falgout sees green: the color of money that comes from the nation's busiest haven of offshore drilling.

• That '70s Show: Detroit
  The Wall Street Journal, July 8
  Nobody seems to be laughing at bankruptcy jokes in Detroit right now, especially after Merrill Lynch used the "B word" publicly last week to describe what might happen to General Motors. Nor was it particularly reassuring when a GM official replied that the company has enough cash to last at least through the end of the year. It was like a doctor trying to assuage a sick man's family by saying he's sure to last until the end of the week.
  

NADA COVERAGE ON BLUE LAWS IN RHODE ISLAND

Several times a year, NADA publishes information regarding public policies afffecting various states of the union. Recently an article was published in the Spring 2008. CLICK HERE to read the NADA State Legal Affairs Monitor regarding Blue Laws in Rhode Island to read the entire article (page 4 of the newsletter).

________________________________________________________

If you have questions on any legislative topic, please contact:

• Nancy Burke, Vice President - Public Policy and Communications,
  nancy.burke@coloradodealers.org, 303.457.5115
• Tim Jackson, President, tim.jackson@coloradodealers.org, 303.282.1448

IRS INCREASES MILEAGE RATES THROUGH DEC. 31, 2008

On June 23, 2008, the Internal Revenue Service announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year. 

The new rates are contained in Announcement 2008-63 on the optional standard mileage rates.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes

CLICK HERE to view the news announcement and more details.

* * * * * * * *

SUMMARY OF 2008 UPDATES FROM THE IRS

See below for various 2008 alerts and updates from the IRS, provided by NADA Regulatory Affairs.

• IRS—Internal Legal Memorandum 200825044 (May 2008)
• IRS—Automotive Alert on Cost Segregation (March 2008)
• IRS—Revenue Procedure 2008-23 (alternative dollar-value last-in, first-out (LIFO) pooling method, the Vehicle-Pool Method) (March 2008)
• IRS—New Audit Technique Guide on Auto Dealership Cost Segregation Issues (February 2008)
• IRS—Technical Advice Memorandum 200736026 Automotive
  Alert (January 2008)
• IRS—Tool Plans Alert (January 2008)
• IRS—Motor Vehicle Technical Advisor Issues New Categories (January 2008)

________________________________________________________

If you have questions on any legal or regulatory topic, please contact:

• Tammi McCoy, Vice Pres., tammi.mccoy@coloradodealers.org, 303.282.1449
• Tim Jackson, President, tim.jackson@coloradodealers.org, 303.282.1448

TO REGISTER ONLINE FOR ANY CADA SEMINAR OR EVENT, PLEASE VISIT: www.coloradodealers.org/registration

* * * * * * * *

F&I COMPLIANCE TRAINING

Compliance is a MUST in your F&I Department; don’t let your dealership be a lawsuit-waiting-to-happen!

• This presentation will cover the F&I legal issues about which every dealership MUST be knowledgeable
• Plaintiff attorneys and government regulators continue to successfully sue dealers locally and across the country.

Topics to be covered include the following:

• Red flags rule requirements
• Adverse action notices (even credit discussions can trigger)
• OFAC Reporting – Do you have a written program?
• How to handle negative equity
• New state forms/requirements
• Record retention rules
• Proper sale of backend products
• Payment packing
• Proper treatment of bank acquisition fees
• D&H fee class actions
• Colorado GAP requirements
• Used car buyers guide; what you probably don’t know
• Advertising hot buttons
• F&I Best Practices
• Who’s getting sued and why
• Update on various state and federal law changes that impact your F&I department
• PLUS more—all with REAL WORLD examples!

CLICK HERE for more information on this training session.

About the Presenter:  Shawn D. Mercer is a partner in the Myers & Fuller, P.A. law firm, www.dealerlawyer.com. His national practice is devoted solely to representing motor vehicle dealers, and he regularly works with dealers to address F&I matters, advertising compliance and consumer complaints. Mr. Mercer regularly represents dealers in disputes with manufacturers and consumers in mediations, arbitration proceedings and in state and federal court.

* * * * * * * * *

*NEW* RED FLAGS RULE COMPLIANCE SEMINAR:
PLUS: PRIVACY/SAFEGUARDS RE-CAP

Rob Cohen, auto industry compliance expert, will provide in-depth training on the new RED FLAGS rule
and a re-cap on Privacy/Safeguards Rules

Make sure you are aware of
these NEW compliance obligations:

Generally, the new regulations require automobile dealers to:

1. Create and implement a written Identity Theft Protection Program with procedures designed to detect and respond to “red flags” indicating potential identity theft.
2. Periodically review and update the written program to reflect changing risks.
3. Train responsible staff members to follow the program.
4. Oversee service providers (i.e., third party vendors).
5. Involve senior management or owner(s) in approving the program and its administration.
6. Prepare annual reports for senior management or owner(s).

Attendees will receive practical, step-by-step instruction on how to create and roll-out a Red Flags Program at your dealership.

Mandatory compliance date of Nov. 1, 2008

PLUS: Re-Cap of Safeguards and Privacy Rules: Dealers must have a Safeguards Program Coordinator, conduct a risk assessment, implement written safeguards to control risks, oversee service providers, and re-evaluate periodically.

CLICK HERE for more information on this training session.

About the Presenter:  Rob Cohen, Esq., President of Auto Advisory Services, is a sought-after speaker and trainer on a wide range of dealership sales and finance topics. Auto Advisory Services (AAS) has been providing assistance to automobile dealers since 1975. With over 550 dealership clients, AAS is the leader in dealership compliance issues.

Discount product offer to seminar attendees: AAS’s Information Safeguards and Identity Theft Manual is an in-depth tool for dealership compliance with the FTC’s Safeguard Rule and ID theft compliance and prevention. A new Red Flags Supplement is included as well. Over 1,500 copies have been sold nationwide. This “turn-key” manual makes implementing a dealership safeguards and ID theft program easy. It is regularly $325, but will be available for order at $199/copy at this seminar. See www.autoadvisory.com for more information.

* * * * * * * *

SAFETY COMPLIANCE SEMINAR

Workers Compensation and Environmental Health and Safety
                                                                                         

Keep your employees safe AND reduce costs 

Review latest compliance changes, presented by CADA endorsed providers:  Wells Fargo Insurance Services and KPA

Part I –WorkersCompensation – New Compliance Issues and Best Practices (1.5 hours)

• Recent changes to Colorado's Workers' Compensation laws have impacted most employers’ ability to maintain control of their claims.
  • Learn what your dealership must do to be in compliance with the law and still effectively manage your claims.
• Learn about the most frequent and costly workplace accidents and how to prevent them.
  • Attendees will take away proven techniques and resources to protect their employees from disabling accident
• Keep your workers safe and ensure legal compliance
• Learn how to improve your dealership profitability by lowering your total cost of risk.

Part II – Environment Health and Safety:  Small Investment. 
Big Return, KPA (1.5 hours)

• Safety and environmental compliance: EPA, OSHA, DOT, and more.   
• Key topics to be covered
  • Hybrid Safety
  • The importance of Hazmat certification
  • Common Environmental Health and Safety (EHS) mistakes and the fines that can ensue
  • Safety Committees and their critical role in dealership
  • Examples of return on your investment in EHS

NADA Publication provided in handouts:
The Federal Hazmat Transportation Regulations (L37, 3rd edition 5/1/2008) An overview of dealership and hazmat employee responsibilities under the federal hazardous materials transportation law, including reference to classification, training, packaging, and other requirements. [Topics: Hazmat, HMR, OSHA, Hazcom, EPA, TDGR, NOMs, ICAO, IMDG, hazard communication, labeling, placarding, packaging, toxic, explosive, environment, flammable, radioactive, corrosive].   $30 value.

CLICK HERE for more information on this training session.

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SALESPERSON TRAINING/PERSONAL DEVELOPMENT

Oct. 14-15, 2008
Course offered twice; one-day each

Chip Thomas has received rave reviews providing salesperson training for other auto dealer associations across the U.S. Mark your calendar for this training event that will be offered twice in October.

More details coming soon!

* * * * * * * *

LIFELINE TO PROFITS SEMINAR

Thurs., Oct. 16 to Fri., Oct. 17
from 8 a.m. to 5:30 p.m.

In this intensive, two-day workshop, you will go through every aspect of your operation, taking a candid look at your dealership to develop a detailed action plan to implement within your store to achieve your dealership’s full profit potential. You'll leave this hands-on training with answers to the following questions:

• Can I enhance and improve the performance of my dealership?
• How do I effectively analyze my current dealership operations?
• What's the best way to identify opportunities for change?
• What steps do I take to fully capitalize on these new opportunities?
• How do I tailor a plan specifically for my dealership?
• What's the most efficient way to put my plan into action?

The NADA 20 Group program is providing industry-leading trainers to conduct the workshop. Each of the trainers has retail experience and will offer critical insight to help your dealership. You will take home a practical action plan specifically designed for YOUR dealership.

CLICK HERE for more information on this training session.

STATE FLEET PURCHASING MEETING

So far calculations indicate that 1,500 cars and trucks were purchased from the Colorado state fleet, totaling more than $30.5 million in sales.

With that in mind, the State of Colorado will be conducting an informational meeting concerning the solicitation and purchase of new vehicles for the state fleet. This meeting will be held on Aug. 14, 2008 from 9a.m.-noon at 633 17th Street, 2nd floor conference room, Denver, CO 80202. We will discuss the 45 various types of vehicles and their specifications that will be included in this year's solicitation.

For more information, please contact Jim Sharp, purchasing agent, via phone 303-866-6155 or e-mail jim.sharp@state.co.us.

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LET US KNOW ABOUT YOUR ACCOMPLISHMENTS!

Have you or anyone else at your dealership won an award recently? Have you or your dealership provided any outstanding community service? We want to recognize such accomplishments. Please send us a brief write-up of the award or event along with any other information to milestones@coloradodealers.org. Also include your contact information for further follow-up.

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