GNYADA November 2016 Newsletter

Tire Labeling Reminder

17

How to relabel:

A dealer may occasionally need to relabel the vehicle, when accessoriz- ing it before sale. This is the case in the following conditions: Whenever a dealer changes the vehicle’s tires before selling it. If the replacement tires are a differ- ent size or have a cold inflation pressure different from the origi- nal, affix a new label. If, before the first sale, parts or accessories have been added to a vehicle that increase the vehicle’s curb weight by 100 lbs. or 1.5% (whichever is less). Dealerships may use any reasonable means to calculate the weight of any add- ons, including scales or reference to shipping weight. A fair conclusion is that the Military Lending Act does not affect car deal- ers who, when they sell vehicles to service members on credit, take a lien, or record a lien for the finance source, on the vehicle financed. Some lenders have reviewed the MLA pro- visions, and have raised some con- cerns about whether financing nega- tive equity and F&I products in con- nection with the sale of a vehicle are exempt from the MLA. The problem is that if they are not exempt from the MLA there are limi- tations on interest, a required written and oral disclosure, and prohibition on enforcement of arbitration provi- sions. These are backed up by very significant hammers including a potential misdemeanor for intentional

Federal regulations require all light- duty vehicle manufacturers and deal- ers to display standardized TREAD Act tire labels on a pillar of the door frame, or on the door itself. The label must specify the vehicle's: tire size cold inflation pressure capacity weight rating (gross vehicle weight minus curb weight)

Dealers can relabel in one of three ways:

1. Putting a new label on top of the existing label. 2. Modifying the existing label with the new tire or weight information. 3. If only the weight changes, placing a supplementary label adjacent to the original label. Replacement placards are available from OEMs, form companies, after- market parts and equipment suppliers, or through the National Truck and

Note: The labels only allow one tire option for front, rear and spare.

SAMPLE VEHICLE PLACARD

Equipment Association or the Specialty Equipment Market Association.

The Military Lending Act: How Does it Affect Your Dealership? 18

The Military Lending Act was passed by Congress a decade ago to protect service members and their depend- ents. The Department of Defense recently issued regulations that took effect October 3, 2016. Some lenders are questioning the extent to which the changes may affect motor vehicle loans. From the beginning, the Military Lending Act had exclusions for any credit transaction intended to finance the purchase of the motor vehicle when the credit is secured by the vehicle being purchased. It also excluded credit to finance the pur- chase of personal property when the credit is secured by the property being purchased. The revision does not affect those exclusions.

violations and invalidation of the credit. That is apparently what is causing lenders to be concerned. NADA has requested that the Department of Defense clarify that the exemptions (as they appear to do) cover not only the vehicle financed, but also negative equity, F&I, and other products. Be aware of these concerns if a finance source contacts you about the Military Lending Act. You may have to engage with the finance source, explain the MLA exemptions, and determine whether it has any special provisions for military lending.

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

The Newsletter • November 2016

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