Pub. 1 Issue 3

VIRGINIA AUTO DEALER www.vada.com 24 TRUE • ese ingenious 20 group ideas are not permitted in Virginia. • Virginia advertising law requires adver- tisement of the full price of a vehicle, with the only permitted exclusion for a dealer fee being the processing fee (with a proper separate disclosure). • e processing fee and the electronic titling fee are the only non-governmen- tal fees allowed in a transaction. • Adding fees to advertised prices not spe- ci cally permitted by state law threatens to reinvigorate lawsuits against dealers for improper fees. • ere is no winning litigation over fees. Even if a dealer ultimately prevails, it still costs substantial attorneys’ fees and unrecoverable time and e ort. I could not get my customer’s deal bought and need to rescind the trans- action. I can unwind the deal only if I return any trade-in and downpayment. TRUE • If customer is told nancing is not approved, either customer or dealer may cancel the contract. If the application is out to several nance sources, get your answers before contacting the customer. • If a deal is cancelled based on the spot language, the customer is entitled to the trade and downpayment. Bullpen trades until deals are done, and do not pay o the trade until the deal is complete. • Vehicle usage fees are prohibited. We are eliminating as much paperwork in the dealership as we can. One of the things we are doing, like other dealerships, is us- ing an electronic credit application process. Even though we are doing this, we still have the customer ll out a credit application in his or her own handwriting, because that is a best practice. TRUE • One problem dealers are facing increas- ingly is the claim that the customer’s income was misrepresented. is may lead to a nance or lease source requiring the customer’s contract be repurchased. e nance or lease source will always claim it is a result of improper activities by dealer employees. • at is o en not the case, with a more frequent problem being misrepresenta- tions by buyers. • Having a customer sit with an F&I per- son and simply provide information to be electronically input to the application to the nance source may be the trend, but it does not protect the dealership. • Have the customer ll out a handwritten credit application, even if it is only name, contact information, work information, and income. Having the customer’s in- come in the customer’s own handwriting is the dealership’s best protection. Inputting vehicle information for credit approval as to model and equipment is a mechanical process which is not neces- sary to review. FALSE • Finance sources are increasingly looking to make their losses dealer losses. • One of the steps they are taking today is to look for “powerbooking” – the over- statement of the model or equipment on a vehicle. • ey may start with a VIN, check to determine if the model and equipment appears inconsistent with the VIN information. ey may go on to actually inspect the vehicle. • Representations of model and equip- ment to nance sources should be regularly reviewed to protect against claims of powerbooking that can cost the dealership its business relationship with a nance source. When doing a large transaction, such as a multivehicle wholesale deal, the best protection for the dealership is to have the seller email wire instructions so we may wire the funds. FALSE • Don’t be a victim of cyber crime. • It is easy for hackers to take residence in your computer system to watch for the op- portunity to steal money with false wire in- structions to accounts that are immediately emptied with the funds going overseas. • Employees should be regularly trained about the dangers of not protecting pass- words and clicking on suspicious links that can lead to phishing scams, malware, and ransomware. • Most importantly, when preparing to transfer money by wire, make sure any emailed wire instructions are veri- fied over the phone with someone the dealership knows to be the recipient of the funds. When a customer comes in to the dealership, we usually get their cell phone number. When they give us their cell phone number, we can send marketing texts. FALSE • Providing a cell phone number may be considered prior express consent, but that only permits you to make “informational” calls con rming an appointment or advis- ing that the vehicle in service is complete. • To do marketing, the dealership must have prior express WRITTEN consent that speci cally indicates the dealer- ship that may call or text, including the phone number for which consent is giv- en, that the customer agrees to receive telemarketing calls, and that consent is not required as a condition of purchase. • is must be signed by the customer. When the manufacturer changes my pri- mary market area, I am really not in a position to challenge it since it is based on scienti c principles. FALSE • Under Virginia Code Section 46.2- 1572.4, any performance standard or program used by a manufacturer to measure dealer performance must be “fair, reasonable, and equitable.” • Assignments of primary market area, or PMA, are always for the convenience of the manufacturer. e manufacturer will typically ignore critical issues such as geographic barriers, tra c patterns, work travel patterns, demographic information that a ect a ordability and desirability of similar brands, model