GNYADA March 2015 Newsletter

20 Yes, Millennials Love Phones, But They Love Cars More

Myth #3 : Millennials don't like cars and don't find them essential.

With so much current speculation around Millennials interest in owning cars, MTV's new research study “Millennials Have Drive” uncovers an increase in young people's passion for cars and car ownership. The findings debunk the following five major myths about young people and the auto industry: Truth : Even among today's growing public transportation options, driving is still Millennials' go-to mode. 80% of Millennials get around most often by car. Myth #2 : Millennials don't want to drive, have no interest in getting their license. Truth: State laws are holding teens back as they now have driving restrictions placed on them that other generations did not face. Myth #1 : Millennials don't drive.

6 in 10 young people would rather buy than lease a car 1 in 3 young people plan to buy and/or lease a new car within the next 6 months Myth #5 : Millennials one true love is technology, especially their phones, and cars cannot compete for their attention. Truth : Unlike previous generations - Millennials see both their car and their phone as a necessity to social connection. In fact, 92% agree that having a smart phone does not replace the need for a car Overall, Millennials value their cars and phones for similar reasons – accomplishing tasks, freedom, explor- ing new places and learning new things. They also agree that both allow for them to interact with friends and family and protects them from the fear of missing out (FOMO)! n n

Truth : Young people not only like cars but are passionate about them. 70%of Millennials enjoy driving 75% of young people agree "they couldn't live without their current car" 60% of Millennials said "they feel like losers among their peers with- out their cars" Myth #4 : Millennials are forgoing the purchasing of cars and other big ticket items. Truth: With the warming of the econ- omy and more young people heading into the workplace and, subsequently, accumulating more savings, Millennials are looking to buy cars. 8 in 10 Millennials see cars as the one big ticket item their age group purchases 3 in 4 Millennials believe they have a lot of purchasing influence n n n n n

NADA Article: Tax Implications of Dealership Facility Image Upgrades

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Many auto dealers have renovated their facilities as the result of factory- mandated image programs. These programs typically involve factory financial assistance to participating dealers to offset a portion of their investment. Dealers often assume they can reduce the cost basis of this investment by the amount of factory assistance received and are surprised to learn that IRS issuances to date state that

this amount is taxable income in the year it is earned.

ing firm Boyer Ritter outlines these mechanisms and provides an example of how applying them may help a dealer to preserve a manageable cash flow. Dealers are encouraged to share and discuss this article with their tax advisor.

Dealers should be aware, however, that there are several mechanisms available to them that may be able to reduce the impact of the current tax obligation associated with factory image program payments. In a brief article entitled Tax Implications of Dealership Facility Image Upgrades, the dealer account-

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2015 11