Recently we had a conversation with a dealer who asked, “why does the association get involved with so many things that look on the surface to take away our focus from the most important reason we exist, the legislative and government relations?”

We are grateful for the opportunity to explain what the association does and how it functions.

NCDU is 100% committed to protecting the dealers and the franchise system that has been and will continue to be the premier model to sell and service vehicles to the motoring public. There is no better way to efficiently and professionally distribute automobiles and the products that accompany them, such as competitive financing and other products, than through a franchised dealer. Depending on which statistic is used, the new car dealers in Utah generate between 14% and 17% of the taxable sales for the state. That is an incredible number, which is a vital foundation block for Utah’s economy.

Since 1979, when the franchise law was first established, to the re-write of the franchise law in 1996, the association has continued to amend the law to keep ahead of the manufacturer’s attempts to weaken the dealer network, push their costs on to us and control the free enterprise principles that make us successful. It has been our role and responsibility to keep the integrity of the franchise system intact.

So how does the association function so that the New Car Dealer franchise system remains strong and prosperous? Here are some of the things that the association does to ensure its legislative and government relations success:

• Most importantly, we realize that the new car dealers’ lifeblood in Utah is the franchise system. Only the dealers and the association will do whatever it takes to protect and preserve it. We have others that will lend a hand, but the heavy lifts have always come from us.
• The success of our association’s governmental efforts has always depended upon our members’ support for all of our legislative efforts. Meetings at the capital, hosting legislators at your dealerships, serving on boards and commissions, running for political office, attending dealer meetings across the state, and being a part of other meaningful functions and activities are critical.
• We understand the importance of personal relationships with the legislature and government agencies that oversee our industry.
• Along with the dealers’ contacts and the team at NCDU, we know and deal with the vast majority of the 104 Utah legislators on a first name basis and maintain an excellent relationship with all of the government divisions who oversee our industry.
• Since 1994, we have not increased our dues. In 1998 we actually reduced dues by 25% asking dealers to instead put that money into our association PAC to help pro-business candidates be elected.
• Over the past six years, we have spent over $400,000 above and beyond our normal budget to stave off legislative efforts that potentially had the effect of eliminating the franchise law, including all the legislation surrounding the Tesla issue.
• From the standpoint of value of our franchise law, consider the unreimbursed expenses that your dealerships would not be able to recoup if we did not have a fair and equitable warranty and parts reimbursement at retail. How much would that cost per store?
• One of the great benefits over the last 21 years has been the Saturday/Sunday closing law that gives the dealers and their employees a six-day work cycle. This eliminates employee burn out as well as reduced expenses which directly impact customers with lower costs
• We retain excellent legal counsel to keep us current on the relevant automotive issues
• Our relationship with NADA’s legal and legislative staff is as good as any association in the country. NCDU played a significant role along with NADA and others to pass the 2017 federal tax bill that kept floor plan interest as a deductible business expense. This means over 650 million dollars in tax savings annually to the dealers throughout the United States
• Throughout the year, staff members of NCDU attend national legal and legislative meetings, participate in interim legislative meetings at the capital and other locations, are active in business coalitions to advance our dealers interests further, and meet with city officials and other groups to help them understand the value and need for a robust franchise system.

So the second part of the dealer’s question was, “why is the association involved in other activities other than its stated mission”? Hopefully, the following information will provide more insight for our members as to why we are also involved in other activities.

• NCDU is a (501c6) trade association whose mission is to advocate for our membership base in all the critical areas in which they function. We also have two “for-profit” entities that are wholly owned subsidiaries of the association. We also operate two “not-for-profit” entities (UADA Group Insurance Trust and Good Wheels Charitable foundation), which have their own boards and budgets. Our funding mechanism is not based on the typical association platform of heavy member dues. In contrast, we based our funding principally on a business model, so our members’ burden is very minimal. In 2020 our member dues were $76,556.00, and the associate member dues were $21,500.00. Our overall budget for the year 2020 (excluding the Trust and Good Wheels) is between $750,000 and $800,000, making total dues from our members, approximately 10% of our budget.
• What we have found over the years is that the business model we have, if done right, can allow the mission of the association, “to protect and preserve the franchise system,” to be accomplished in an effective, efficient, and expert manner, all the while keeping costs to the members very low.
• Some Utah associations have very large members (banks, credit unions, hospitals, etc.) and others have many members like the Utah Realtors do, at approximately 11,000. This gives them a vast membership base and quite a bit of funding. NCDU has approximately 150 members, so to assess big dues is just not practical. Therefore, we operate several businesses that all function to support the operation of the association.
• Participating in the other dealer services, our “for-profit entities” is also vital to the association’s long-term success. These services are the primary funding sources that enable NCDU to do what we do best.
• As an NCDU team, we balance both legislative/government relations while, at the same time, operating a very successful small business as a principal funding source for the organization.

This is where we need your help. The question asked by one of our dealers gives us an opportunity to ask our membership to support our association in a more significant way. With the background on our mission and what is involved in making it all work, we would ask that you take a more in-depth look at what we offer in terms of products and services and obtain them from us. A listing of our many products and services are included for your consideration.

Remember, the sole reason we exist is to ensure all Dealers are successful. We will continue our commitment to work hard and ensure this success happens. It is a privilege to be part of what we consider to be the greatest industry on the planet. 

Thank you, NCDU Team