Bulletin No 22 November 28, 2012 Pennsylvania Automotive Association in this issue... Page 1 Dealers Must Display Fuel Economy Guide PAA Scholarship Applications Online Page 2 Documentation in a Deal Jacket For a Vehicle Purchase Page 3 Frequently Asked Titlework Questions Page 4 Regulation Z and M Thresholds Increase PAA News Bulletin is a publication of the Pennsylvania Automotive Association 1925 North Front Street Harrisburg, PA 17102 President John Devlin Director of Communications Melanie L. Bible Directory PAA - 1-717-255-8311 1-800-242-3745 (PAA & Title) PAA Fax - 1-717-255-8340 DPS - 1-800-692-7295 PAA Insurance - 1-800-222-8712 E-mail - mail@paa.org www.paa.org www.paadps.com www.paa-foundation.org (Attn: General Managers and Controllers) Dealers Must Display Fuel Economy Guide The Environmental Protection Agency and Department of Energy have released a preliminary 2013 Fuel Economy Guide which is available for download and print at www.fueleconomy.gov. Dealers selling new vehicles with a gross vehicle weight rating under 8,500 lbs are required to prominently display paper copies of the guide at each location where new vehicles are offered for sale. These guides must be available for free upon customer request. Beginning with the 2008 model year vehicles, city and highway estimates account for conditions such as higher speeds and faster accelerations, air conditioning use and cold temperature operation. Further details regarding the determination of gas mileage (mpg) ratings are available at www.epa. gov/ fueleconomy. The annual fuel cost estimates in the electronic fuel economy guide are updated weekly to match Energy Information Administration s current national average prices for gasoline and diesel fuel. Paper copies of the guide are no longer mailed automatically. To request a paper copy of the guide, call the DOE s Energy Efficiency and Renewable Energy Information Center at (877) 337-3463 or visit http://www. fueleconomy.gov/feg/printguides.shtml PAA Scholarship Applications Online In 2013, the Pennsylvania Automotive Association, through a fund within the PAA Foundation, will award scholarships in two areas. 1. Community Service Scholarship awards will be available to the children, step-children, and grandchildren of Pennsylvania new car and truck dealership personnel who demonstrate charitable characteristics on a continual basis, volunteering their time and their talents to their communities, schools, churches, and other charitable organizations. 2. Automotive Technology Scholarship awards will be available to individuals who want to develop the skills necessary to work as a technician in the new retail motor vehicle industry in Pennsylvania. Please help make the PAA Scholarship Program a success by encouraging eligible students to apply. Scholarship applications are due by March 1, 2013. Additional guidelines and applications are available online at www.paa.org. The PAA Scholarship Program Needs Your Support These very worthwhile programs need contributions from the dealer community in order to continue. Donations in any amount can be made online at www.paa. org or by contacting PAA at 1-800-242-3745.
Bulletin No 22 November 28, 2012 Page 2 Do you have charitable intentions? Learn more about PAA Foundation by contacting PAAF at 1-800- 242-3745 or online at www.paafoundation.org. (Attn: General Managers, Sales & Office Managers, & Title Personnel) Documentation In A Deal Jacket For A Vehicle Purchase Recently, dealers have questioned what specific documentation needs to be included in the deal jacket for the purchase of a new or used vehicle. Below is a list of documentation that should be present in a deal jacket for the purchase of a vehicle, along with additional documentation that should be included if there is a trade-in involved in the transaction. Purchase of New or Used Vehicle: Bill of Sale/Buyers Order Copy of MV-4ST (previously titled in PA) or MV-1 (New and out-of-state titled vehicles) Applicant Summary Statement (Electronic Registration) Copy of Title or MSO Copy of FTC Buyer s Guide Extended Warranty Agreement Proof of Insurance (i.e., copy of insurance card) Copy of Privacy Notice Bank Contract Bank Approval Risk Based Pricing Exception Notice Copy of Signed Credit Application Credit Report Copy of Check or other form of payment Copy of Valid Identification (front and back of ID) Copy of Registration Card Limited Power of Attorney OFAC Check Report Aftermarket product disclosure (if the vehicle is financed) Trade with Title (No Payoff): Signed Title Mileage Statement (i.e., Title, MSO) Limited Power of Attorney Trade without Title (No Payoff): Copy of MV-4ST (copy of Applicant Summary Statement if titlework submitted online) Mileage Statement (i.e., Title, MSO) Secure Power of Attorney MV-38O (Duplicate Title) Trade without Title (Payoff): Mileage statement (i.e., Title, MSO) Certificate of Title Release Documentation of payoff information Secure Power of Attorney Lien Verification Dealers should review their record retention programs in order to ensure that the appropriate controls are in place to preserve both paper and electronic data. Information on record retention can be found in PAA News Bulletin No. 20 (10/31/2008). NOTICE OF ANNUAL MEMBERSHIP MEETINGS The PAA Annual Meeting will be held at the Hotel Hershey, Hershey, PA, on Thursday, December 6, 2012, beginning at 1:00 PM. The PAA Services, Inc. Annual Meeting will immediately follow.
Page 3 Bulletin No 22 November 28, 2012 (Attn: General, Sales and Office Managers, & Title Personnel) Frequently Asked Titlework Questions and Answers PAA has received the following questions at recent seminars regarding titlework issues: Are dealerships permitted to hand titlework over to customers? No. The PA Vehicle Code requires the dealer to deliver the application to PennDOT either by mail or authorized messenger service unless the vehicle is to be titled out of state. When is an agent able to inquire about an applicant s vehicle information for free through an on-line registration program? An agent can inquire about an applicant s vehicle information for free when the agent first obtains written authorization from the applicant on the online inquiry form for a vehicle being traded or purchased. The inquiry screen cannot be printed, only the lien verification screen can be printed (for a fee). When is a lien verification required to be obtained? Prior to Section B on the Secure Power of Attorney being completed, the dealership must obtain a print out of the vehicle information showing title brands, odometer status, title number, etc. Appropriate fees must be paid. Can dealers use Limited Power of Attorneys? Yes. Limited Power of Attorneys can be used on any state paperwork except for the back of a title or Manufacturer s Certificate of Origin (MCO). What is a valid odometer disclosure form? The Pennsylvania title, MCO or Secure Power of Attorney are valid odometer disclosure forms. A completed copy of the front and back of the title or MCO must be given to the customer at time of sale unless using Section B of a Secure Power of Attorney. The white unsecured odometer disclosure forms became obsolete in December 1989. If the applicant recently moved within Pennsylvania to another location in the state, what credentials would satisfy PennDOT s address and I.D. requirements for titling a vehicle? A valid Pennsylvania driver s license or I.D. card and an updated change of address card or an internet print out showing the change of address was completed prior to vehicle delivery. Can dealerships trade a lease vehicle in and give the customer a trade-in tax credit? Yes. Although, the customer only receives trade-in tax credit if the customer takes title, and if outstanding lease payments and residual buyouts are satisfied and sales tax is paid. Then the customer would own the leased vehicle and be entitled to tax trade credit. If outstanding lease payments and the residual buyout are satisfied by the dealer on behalf of the customer, full sales tax applies. These payments are subject to sales tax because they are part of a contract between the leasing company and the customer and are not eligible for a dealer s sales tax exemption because the customer does not own a lease. If a parent is gifting a vehicle to a child and the child would like to use the vehicle as a trade-in, would the dealership be permitted to show the vehicle as a trade? Yes. Although, the vehicle can only be eligible for tradein tax credit if the ownership is first transferred to the child and titled in the child s name, then traded in by the child. TRUCK-RELATED QUESTIONS When is VIN verification required? When registering all vehicles from out of state, all trucks, truck tractors, and motor homes, whether they are on an MCO or an out of state title, VIN verification is required. When are medical cards required? Medical cards are required for anyone driving a commercial vehicle interstate which has GVWR of 10,000 lbs. or more. For those driving intrastate commerce, a medical card is required for anyone driving vehicles registered over 17,000 lbs for commercial purposes. When is a customer required to register a truck in combination? Combination weights are required on the power unit when they are pulling a trailer which has a GVWR of more than 10,000 lbs. When is a DOT number required? A DOT number is required on all trucks over 10,000 lbs. that travel interstate and are used commercially.
Bulletin No 22 November 28, 2012 Page 4 Regulation Z and M Thresholds Increase PAA/DealersEdge Webinar Schedule December 6 - How to Analyze Your DMS Billing and Systematically Reduce Costs December 13 - How to Plan for Parts Department Success in 2013 December 18 - How to Create a Business Plan for your Service Department Opportunities for 2013 To participate in one of the upcoming PAA/ DealersEdge Webinars, visit paa.dealersedge. com. Save the Date South Beach Miami Beach, Florida October 9-13 On November 20, 2012, the Federal Reserve Board (Board) and the Consumer Financial Protection Bureau (CFPB) announced increases in the dollar thresholds in Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) for exempt consumer credit and lease transactions. These increases are consistent with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd- Frank Act) amendments to the Truth in Lending Act and the Consumer Leasing Act to adjust these thresholds annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers. Transactions at or below the thresholds are subject to the protections of the regulations. The adjustments to the thresholds reflect the annual percentage increase in the consumer price index as of June 1, 2012 and will take effect on January 1, 2013. Based on the adjustments announced, the protections of the Truth in Lending Act and the Consumer Leasing Act generally will apply to consumer credit transactions and consumer leases of $53,000 or less in 2013. On July 21, 2011, the Dodd-Frank Act amended the Truth in Lending and the Consumer Leasing Act by increasing the threshold for exempt consumer leases from $25,000 to $50,000 and requiring that, on or after December 31, 2011, this threshold be adjusted annually by any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Accordingly, the exemption threshold was adjusted to $51,800 effective January 1, 2012. Based on the annual percentage increase in the CPI-W as of June 1, 2012, the Board and CFPB are adjusting the exemption threshold from $51,800 to $53,000 effective January 1, 2013. See PAA News Bulletin No. 15 (8/12/2011). Although the Dodd-Frank Act generally transferred rulemaking authority under the Truth in Lending Act and the Consumer Leasing Act to the CFPB, the Board retains authority to issue rules for certain motor vehicle dealers. Therefore, the agencies are issuing these adjustments jointly. The notices that will be published in the Federal Register are available online at www.federalreserve.gov/newsevents/press/ bcreg/20121120a.htm. PAA Tax Bulletin May Be Delayed Each year, PAA publishes a tax bulletin and a checklist for dealers with state and federal tax information provided by Boyer & Ritter CPAs. Because much of the information used to compile the Bulletin is at this time unconfirmed, PAA will be delaying the publication of the 2012 Tax Bulletin. As information becomes available, it will be published and provided to the dealer community.
PAA Scholarship Program Donate Today Awards scholarships to students affiliated with new car and truck dealers in PA. Children of your employees or young technicians. Awards of up to $20,000 to further their education. To continue, donations are needed from the dealer community. Every Dealership is a Potential Winner. Please complete and return the contribution form. Name I would like to contribute to the PAA Fund for Scholarships: $1,000 $125 $500 Other $ Method of Payment: 1. Check enclosed, payable to PAA Foundation, 2. PAAF Donor Account Transfer, 3. Credit Card Your donation can be made using your credit card. Please provide the following information and FAX it to PAA at (717) 255-8340. Card Type Cardholder Name Card # Exp. Signature The Next Student Helped May be One of Yours