Compliance

Don’t wait for the boogie man…

Let us begin with excerpts from the “New-Car Price Transparency & Regulation Study” A Driving Sales White Paper from the Spring of 2012

What exists today is a poweder-keg situation:

  • Federal regulators stepping up activity in an election year
  • Harsh penalties and the use of a hungry media to penalize those dealers caught in order to intimidate others
  • An age of social media that brings more long-term consequences to public humiliation than business has ever seen before
  • A competitive dealer body still coming out of a deep industry downturn with new-vehicle sales nowhere near what they were five years ago
  • Past enforcement so lax in many states that many dealers have forgotten what the regulations truly are

Conclusions:

As it turns out, we were correct in our hypotheses that there is no standard way that dealers price new vehicles when incentives apply and no uniform manner in which document fees are disclosed.  With the FTC looming over the auto industry and making its presence and consequences known, not only are the consumers at a disadvantage, but the dealers are at risk of suffering far more than a few hundred dollars on an incentivized vehicle.  The transparency in pricing and fee disclosures that was previously demanded by the transparent world of online shopping and social media will now inevitably be enforced by both federal and state regulators.  Dealers walk the line toward working on a more transparent pricing system while becoming advantageously compliant compared to competitors.  The question is:  Will individual dealers reach that sweet spot before the FTC starts knocking on the dealership door?” (New-Car Price Transparency & Regulation Study” A Driving Sales White Paper from the Spring of 2012)

All of the above and the subject of this study was pricing and fee disclosure.  Our experience shows that when it comes to advertising lease payments online, over 85% of sites surveyed contained Federal Regulation M of the Consumer Leasing Act disclosure errors and some of them were on OEM ads.  Many of the mistakes were due to incorrect entries in the dealer console provided by the website/inventory marketing company.  Others came from the inaccurate usage of static ads by the marketing/advertising firm employed by the dealer.  Most were the result of a dangerous combination of complacency and lack of knowledge.  When the FTC comes knocking it will be the dealer who will be held responsible.

Our technology automatically creates federally compliant Reg M (leasing) and Reg Z (financing) disclosures for each payment quoted for all lender/lessor programs to the VIN level. These disclosures can then be used across all digital and traditional marketing for both consistent messaging and Federal Regulation compliance.  How much is this peace of mind worth to the managers and owners of a dealership?

Please read the following document for more info:

Comments are closed.