ARE YOU AN INFORMED CAR DEALER?

Yes, many of you are “informed” in that you know how and when to buy cars, what price to sell them, and know “the business” fairly well.

But there is more to it than just moving units.

I wrote a post called Where Are The Snakes?. In that post, I asked you to revise your Situational Awareness to identify the hazards in your industry, and to make a plan to deal with them.

Let’s touch on that a little more. I got a call from a dealer (let’s call him Bill) recently who had a title application rejected because he did not charge enough sales tax. Seems the county surcharge went up and he was unaware of it. Cue the angry music as he asked, in all seriousness: “Why didn’t your company tell me about this?”

I reminded Bill (nicely) that his state Department of Revenue does not notify us about these changes. They do, however, notify everyone (that includes you, Bill) with a Sales Tax Registration about these changes, and do so typically a number of months before the change will take effect. I asked Bill if he remembered getting such a letter or notification. He sputtered a bit before declaring that he “doesn’t have time” to read everything that comes from the State, because he has a business to run! Well, yes, but reading those notifications from the State are PART of running your business. If you are going to ignore the state in a business that is very heavily regulated by the state, then you are NOT running your business.

A few years ago, a dealer (we’ll call her Linda) scanned and emailed to me the letter she got from her state that informed her that they were moving to an Electronic Titling System, and it would take effect six months or so from that letter. She asked me if we were ready (we nearly were, in fact) and how we planned to notify the dealers that it was in place in the software. We did send out an email to the dealers a month in advance of the date, and let them know it was ready.

Cut to two weeks after the cutoff. My phone rings, and another Dealer from that state is angrily asking why he cant take his title app down to the tag office anymore. Seems he went there that morning and they told him to process it electronically. He wants to know how to do this. I asked him why he did not get prepared when he got the notice six months ago, and at the very least, six weeks ago when we, the DMS software company, sent him an email saying that we had his state’s electronic titling ready? Well, you see, he was “too busy running his business” to read emails or open letters from the state. I gave him the web page and phone numbers to get started. Because of his delay in getting that process going, he was late filing the title, and paid an extra fee. He told me later on he did not think it was “fair” to punish him for something he did not know about. I reminded him he had at least two chances to check into it, and surely he overheard talk in the used car community about it? Well, he admitted he had heard “something” about it, but again, “too busy running a business” to find out about it.

I will repeat this: If you are “too busy” running your business to pay attention to the governmental units regulating your business, then you should not be in business.

Over my years in this chair, I’ve seen the notices of fines about sales taxes, and the letters from the DMV reminding the dealers to process the titles. Most states require the dealer to do both. I’ve seen the levy notices from the IRS because dealers filed income taxes wrong, and the penalties from State Department of Finance for overcharging interest. These are almost always accompanied by a dealer saying “I didn’t know.” In these situations, I can usually find the information within mere moments available on the internet, not only from the State or Federal websites, but also from industry advisers discussing it.

Make time to run your business. Set aside a time each week to open and review all State Notifications. When you see an Effective Date, open your calendar and set the date, and set a reminder a month and a week in advance. Be ready.

Set aside another time each week to review the regulations for your business. Find and talk to an experienced consultant that knows your business. We’ve talked before about having an attorney and a CPA that knows the industry well. Join the business associations that can keep you informed. In our case, it’s usually your state’s Independent Auto Dealer Association. Go to https://www.niada.com/ and find your state under the “Membership By State” links. Membership is dirt cheap considering all the information they will give you. (Disclosure: I am not a member of the NIADA or any State IADA, nor do I get anything if you join.)

So, do you want to run your business, or do you want to pay fines?

Thanks for reading, see you next time.

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