Top 10

Auto Dealers unfortunately make the top 10.

Debt collection, auto sales and home repair led a national list of consumer complaints for the second year in a row.

The list, released by Wisconsin Attorney General J. B. Van Hollen’s office today, is the result of an informal nationwide survey conducted by the National Association of Attorneys General. Credit cards and Internet goods and services tied for fourth place on the list. Lending and mortgages came in sixth; telemarketing and no-call lists, seventh; auto repair, eighth and auto warranties and telecommunications tied for ninth.

We encourage all dealers to realize that this is the consumer perception and to make sure every transaction is above board.

Look out for Enterprise Rent-A-Car 2006-2008 Chevy Impalas

A front page expose in the Kansas City Star on Sunday, August 16, (link: http://www.kansascity.com/842/story/1385463.html) revealed that Enterprise Rent-A-Car had ordered roughly 66,000 2006-2008 Chevy Impalas from GM with the side-curtain airbags (standard equipment on those model years) deleted (i.e. not installed on the factory floor) in order to save $175.00 per unit. When Enterprise resold the units (at auction, to dealers, as well as on its own used car lots), it did not disclose this deleted safety equipment. Thus, dealers reselling these units would not have known to disclose the lack of side airbags, which are listed as a standard feature on those models.

Max Supports Bill to Reverse Dealer Terminations

NADA reports today that auto dealers trying to reverse the closing of more than 3,000 General Motors Co. and Chrysler Group LLC dealers won the backing of two key members of Congress this week. Sen. Max Baucus, D-Mont., chairman of the powerful Senate Finance Committee, and House Minority Leader John Boehner, R-Ohio, signed on to bills in Congress to reverse the June closing of 789 Chrysler dealers and the planned closing of at least 1,300 GM dealers. Boehner joins House Majority Leader Steny Hoyer, D-Md., as a co-sponsor in a rare example of party leaders joining forces on a bill. That brings the total to 30 senators and 264 House members that are on record ifavor of bills seeking to reverse the closings.

SBA Begins Dealer Floor Plan Pilot Initiative July 1

SBA is introducing a guaranty loan pilot initiative to make available 7(a) loan guaranties for lines of credit that provide floor plan financing to support that sector of the Nation's retail community that traditionally requires floor plan financing. SBA is creating this pilot initiative to help address the significant decline in the number of lenders that have provided the majority of this type of financing in recent years. Under the Dealer Floor Plan Pilot Initiative, which will be available through September 30, 2010, SBA will guarantee up to 75 percent of a floor plan line of credit between $500,000 and $2,000,000 to eligible dealers. The Dealer Floor Plan Pilot Initiative will be effective on July 1, 2009, and will remain in effect through September 30, 2010. SBA will begin accepting applications on July 1, 2009 and begin reviewing and approving applications the week of July 6, 2009. A question/answer whitepaper and Federal Register Notice is posed on the Dealer Law page at SmithLawMt.com.

Bankruptcy Court Approves GM Sale

The Bankruptcy Court approved GM's 363 sale on Sunday, July 5, 2009 to sell its best assets to a new, government-backed company, a crucial step for the automaker to restructure and complete its trip through bankruptcy court. With the approval of the restructuring plan, G.M. and the government are seeking to close the sale by Thursday afternoon. The completet text of the decision is posted on SmithLawMt.com on the Dealer Law page.

HOLD YOUR WATER ON CASH FOR CLUNKERS

Hyundai Motor Co. is apparently advancing money to U.S. dealers so they can immediately take advantage of a “cash for clunkers” program. The payments cover new-vehicle credits for consumers until the federal government completes rules for the program later this month. We recommend that Montana Dealers follow the advice and recommendations of the NADA strongly cautioning dealers from attempting any ‘cash for clunkers’ transactions until the Department of Transportation finalizes the program and implements the rules around July 24. Dealers not in compliance with the program may be held liable for any penalties and may have to fund the government’s incentive out of their own pockets if the sale does not meet the program’s requirements. According to Bloomberg, Dealers could be fined $15,000 for each sale for violating the rules.

30 States Reach Agreement with GM over Franchise, Lemon Laws

LINCOLN, Neb. (Legal Newsline)-Thirty states have reached a tentative agreement with General Motors Corp. over concerns the troubled automaker's bankruptcy plan would trample state laws, Nebraska Attorney General Jon Bruning announced Thursday.Bruning, who led the attorneys general in their opposition to the plan, said other states are expected to sign on to the agreement."We are pleased GM was willing to work with states to resolve our concerns so that consumers, dealers and the environment will continue to receive the protection of state law," said Bruning, a Republican and president of the National Association of Attorneys General.Bruning, in an interview with Legal Newsline, said GM's bankruptcy plan would have forced current dealers to sign new agreements that would leave them with no state protections.The Chapter 11 plan would have also disproportionately affect rural markets because some motorists would be forced to drive hundreds of miles to have their GM model serviced by a dealership.Under the Bruning-led agreement, General Motors has agreed to acknowledge that all dealers staying with the new GM will be protected by state franchise and dealer laws and honor its express warranties and comply with state lemon laws, among other things."I'm confident the concessions given to the states, while of great benefit, won't interfere with the ability of new GM to function as a viable company nor should they add to the burden placed on taxpayers by the (U.S.) Treasury's purchase of GM," Bruning said Thursday.Attorneys General Richard Blumenthal of Connecticut, Greg Abbott of Texas, Richard Cordray of Ohio and John Suthers of Colorado were on the executive negotiating committee representing the 30 states.Bruning urged his fellow attorneys general to join him in formally opposing the company's original restructuring plan. The chief legal officers from 36 states followed suit and filed their objections with the U.S. Bankruptcy Court for the Southern District of New York. From Legal Newsline.