The automotive dealership has several state and federal laws that it must obey. These laws are intended to protect employees and consumers from questionable practices. Compliance with these laws is important for your business to avoid steep fines and penalties. Failure to comply can also cause huge reputational damage to your dealership. Here are a few ways to ensure that your dealership stays compliant.
As an automotive dealer in the US, you must be conversant with consumer protection regulations, federal and state laws. The Federal Consumer Leasing Act, Truth in Lending Act, Fair Credit Reporting Act, and Gramm-Leach-Bliley Act are but a few examples. Any breach of these legislations will see you face heavy penalties and steep fines.
There are several laws and regulations set by the federal and state governments to control automotive dealerships, and it can be stressful and straining for you to keep up with them all. You will not only be working on ensuring you keep up with all the required laws, but there is the challenge of knowing whether you are implementing them in a legally acceptable way. This is where compliance audits come in handy.
Nowadays, there are multiple state and federal regulations regarding automotive dealerships. These regulations' primary intent is to protect consumers as well as employees from unethical practices.
You risk paying hefty fines and other consequences if you run afoul of these regulations, not to mention the damage to your reputation. Thus, the best thing to do is always ensure you maintain a dealership that adheres to state and federal regulations. Below are the top five ways of ensuring your dealership remains compliant.
Dealership compliance is a vital consideration, especially after the creation of the Consumer Finance Protection Bureau. It is your job to keep up with numerous regulations, from marketing to F&I and inventory. Although it seems like a lot of work, these five strategies can help keep your dealership compliant.
DESIGNING A SUCCESSFUL F&I PROCESS FOR YOUR BUSINESS
Having a well-established F&I department is one of the most important things for financial growth. Establishing strong profit centers within your organization helps you ensure that the purchase process is well monitored by scrutinizing the customer. Some of the ways that the F&I process helps dealerships are; access client credit reports, review credit application, and budget clients' credit reports and leases or loans within the set guidelines of financial institutions such as banks, financial companies, and lease companies. Conducting a successful F&I process plays an important role in client engagement and attracting prospects through the opening.
Top 10 Dealership Laws and Regulations
As we have already discussed, the automotive retail industry faces a complex challenge of complying with the stringent legislation as set by state and federal governments. Many dealerships have often fallen short of expertise, time, and workforce to uphold the mandatory requirements.
In part two of our article, we break down the regulatory language and jargon to help you understand what the federal and state is required of you.
In the automotive industry, laws and regulations are always being updated and changed. It’s essential to keep up on the latest information and news and also be consistent with Deal Audits. Here are a few tips to consider when needing to keep your dealership compliant.
While there are no laws that require you have to hire a compliance officer, there's a chance that without a hyper-focus on compliance, you could wind up breaking actual laws as a result.
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Dealership compliance has never been more important. Businesses are going to suffer in the wake of the pandemic. Do not put your dealership at a disadvantage by falling out of compliance with state and federal regulations. With more people getting out and about dealerships are opening again. Make sure your dealership is ready to float in the sea of uncertainty that is today's consumer market. Is your dealership compliant with federal and state regulations?