Page 50 - GIADA Aug2017Digital

LEGAL RESOURCES

Continued from page 46 risk to think that a consumer won’t find That way when an issue comes along you
first documents I look for when mounting out you bought the car for example with have the money set aside to refer to Rule
a defense BUT it is not a blanket “get out a “frame damage” announcement or even #1 - BE NICE. Similarly, pay your taxes,
of jail free” card. This is not monopoly and under the RED light and as is for mechan- perfect the titles and liens on time and stay
there is much more at stake. If you know ical. BE AWARE and think about the risk. in compliance so that when issues arise
about an issue you likely need to disclose you don’t have anything to fear when you
the issue or recognize that you are play- RULE 4: Plan for issues: Set up accrual ac- must turn over documents, go through au-
ing a high stakes game of poker in which counts, pay your taxes. You are in the busi- dits, etc. These are all areas that planning
the odds are stacked against you. It is also ness of selling used cars. Used cars have and accrual is necessary. Part of being a
common that dealers think if the car they issues, your customers have issues, your business owner is to recognize the realities
sold only cost $4,000 the risk is $4,000 employees have issues and my guess is that of your business and YOUR BUSINESS is
or less BUT don’t be fooled! Defending YOU have issues too… You know all this full of issues and as such you should rec-
a dealer on a lawsuit based on a $4,000 and therefore as the dealer YOU should ognize them and plan for them.
sale often costs the same as defending a plan for issues and fund them accordingly.
case on an $80,000 car. To make matters On many occasions clients first response RULE 5: Set up a compliance review. This
worse if the dealer had bad faith, mali- to a lawsuit to me as their defender is that is my legal fine point… There is no such
cious intent, committed fraud or some they didn’t have the money to pay the cus- thing as 5 rules to keep you out of trouble
other deceptive practice the damages can tomer. You need to know that this is NOT so my Rule #5 encompasses hundreds of
include legal fees and even treble damag- a legal defense. To protect your dealership rules. It is likely too burdensome for YOU
es, meaning 3 times the actual damages. and give your managers an easy way to to have a staff to get and keep YOUR deal-
The best way to stay out of trouble with take care of post-sale issues you should set ership in compliance but there are several
a disclosure issue is FULL disclosure. In up a “goodwill” accrual account and put a ways you can be diligent. First forget the
today’s world of information, it’s a bad few dollars into it each time you sell a car. saying that “what you don’t know can’t
hurt you” and get yourself informed on
YOUR dealership. Become a student of
YOUR business specifically and the over-
all business of being a dealer generally. Let
a professional firm like mine or a myriad
of others review your business to help you
understand how your dealership is doing
when it comes to compliance. Otherwise
you may have a compliance review from
an IRS agent, a Plaintiff’s attorney, a judge
or a criminal investigator and none of
these reviews are set up to help your busi-
ness; they are to punish you for non-com-
pliance.

It’s your dealership and you have the pow-
DON’T GET LEFT BEHIND! er to wait, gamble and hope for the best or
take your compliance seriously and plan
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48 | GIADA Independent Auto Dealer AUGUST 2017