Pub. 1 2018-2019 |Issue 4

8 Dealerships and Automotive Compliance W hen legislation is overly broad, being compliant with that legislation be- comes extremely difficult. Automotive compliance provides a good example. Dealerships are subject to a seemingly unending list of regulations that affect almost every aspect of run- ning the business, and failing to comply can create serious trouble. All of the following are regulated: • Buying • Communicating with customers • Financing • Formatting emails • Insuring • Preventing identity theft • Reporting cash payments that are excessively large • Selling Consider the following: • Cash payments: If a dealership accepts an extremely large cash payment, the IRS wants to know about it less than two weeks after a sale has been made. Failure to report exposes dealerships to the very real possibility of big fines and time in jail. • Customer communication: There are many different ways to communicate with customers, but there are also many rules about how that communi- cation is to take place. Most states have rules about how a vendor can contact someone, not to mention limited con- tact times. Dealerships are required to honor “Do Not Call” lists, must follow rules about the information that is included in email messages, and are also restricted when it comes to using pre-recorded messages. • Identity theft: If a dealership doesn’t follow procedures to prevent identity theft, not only does the dealership lose valuable inventory, it can be held le- gally accountable for not catching the person who committed the robbery. What can you do to protect yourself when it comes to automotive compliance? • Choose a compliance officer • Train the dealership’s staff • Put your dealership association to work Choose a compliance officer One smart strategy is to have a compli- ance officer whose job is to make sure business problems are being solved correctly. Why should dealerships have a specialist instead of delegating to a general manager or a sales manager?