Pub. 4 2022 Issue 2

NADA Update: Spring 2022

As I was just elected in February, this year’s NADA Show was my first opportunity to get a glimpse under the NADA tent. Suffice to say, I was very impressed with the organization and its leadership. NADA’s singular purpose is to represent franchised auto and truck dealers at the federal level. Their political action committee, NADA PAC, is ranked among the top five industry PACs in Washington, D.C., alongside the National Association of Realtors (NAR) or Credit Union National Association (CUNA). Also to note are the structural parallels between the NHADA and NADA: both are board-driven associations with the best interests of dealers in mind. As we look back on the first quarter, here are a few key trends to note:

Dealers are All-In on Electric Vehicles
You’ve seen the ads on TV — manufacturer commitments pledging to become all-electric, and recently, gas prices fuel this discussion. While, yes, dealers are all-in on this movement, the buy-in on a state-to-state level varies. For New Hampshire in particular, our narrative remains the same — if you build them, we’ll sell them. However, it isn’t that easy. In order to successfully roll out electric vehicles in NH, we need the supply, infrastructure, and customer incentives, and so far, we have zero out of the three.

LIFO Relief Still Being Fought by NADA
The pandemic slowed or stopped production at vehicle assembly plants and suppliers across the globe, creating a major foreign trade interruption in the U.S. vehicle industry. As a result, dealers using the last-in, first-out (LIFO) accounting method cannot acquire sufficient inventory to avoid an unexpected tax liability triggered by LIFO recapture. On a bipartisan basis, 92 House Members and 52 Senators wrote a letter to urge the Treasury Department to use its authority to grant LIFO relief for dealers because of unprecedented inventory declines caused by a “major foreign trade interruption” related to the pandemic. New Hampshire Senator Maggie Hassan has been very supportive of NADA and NHADA’s efforts to secure LIFO Relief and signed onto the above-referenced letter. In addition, both Reps. Annie Kuster and Chris Pappas signed the House letter. Congress should urge Treasury to grant temporary LIFO relief for businesses facing difficulty replacing inventories due to pandemic-related global disruptions, including foreign semiconductors, that have resulted in reduced auto production. Recently, H.R. 7382 and S. 4105, two new pieces of legislation, have been filed to address the supply chain disruption. While the Treasury Department remains quiet, NADA continues to keep up the fight.

Repeal the Federal Excise Tax
Congress imposes a 12% federal excise tax (FET) on the retail sale of most new heavy-duty trucks. This tax depresses heavy-duty truck sales and delays the purchase of cleaner, safer, and more fuel-efficient trucks. Truck manufacturing and assembly employment are significant in the U.S, and the FET negatively impacts American truck industry jobs. Congress should repeal the FET to help protect U.S. jobs, replace older trucks with newer and greener trucks, and promote the adoption of advanced technology trucks. In July of 2021, Rep. Chris Pappas (D-N.H.) sent a letter to the Democratic leaders of the U.S. House of Representatives calling for a repeal of the 12% federal excise tax on new heavy-duty trucks and trailers. Rep. Pappas’ letter, signed by 30 House Democrats (including New Hampshire Rep. Annie Kuster), was sent to Speaker Nancy Pelosi and House Democratic leaders, urging them to include FET repeal in upcoming infrastructure legislation and replace the tax with an equitable funding mechanism for the Highway Trust Fund (HTF). In his letter, Rep. Pappas highlights that repeal of the FET will help America’s truck fleets replace older heavy-duty trucks with newer, safer, and greener trucks and ensure a more consistent revenue source for the HTF. “New heavy-duty trucks today have the latest emission control and safety technologies and are cleaner, safer and more fuel-efficient. With more than half of the Class 8 trucks on the road over 10 years old, repealing the FET would benefit the environment and improve highway safety by accelerating fleet turnover,” the letter stated.

“We thank Rep. Pappas for his work to repeal the outdated FET in the New Hampshire tradition of environmental protection and commonsense tax policies,” said Peter McNamara, president of the New Hampshire Automobile Dealers Association, which also represents heavy-duty truck dealers in the state. “Repealing and replacing the FET will speed up the adoption of newer, cleaner and safer trucks on the road by making them more affordable, support New Hampshire jobs related to truck retailing and reduce the tax burden placed on many small businesses.” Please refer to

FTC Safeguard Rules
By now, all dealers are familiar with the requirements of the Federal Trade Commission (FTC) “Standards for Safeguarding Information” (Safeguards Rule). The rule was first issued in 2002 and took effect on May 23, 2003. It requires dealers to develop, implement and maintain
a comprehensive written information security program. NADA believes the FTC is a major compliance concern for dealers, and it is imperative that you use the NADA Safeguard Process to protect yourself. If you don’t, you may find yourself in hot water like Napleton Auto, a multi-state dealer now facing a 10-million-dollar lawsuit on both a corporate and personal level. On Dec. 9, 2021, after several years of notice, hearings and debate, the FTC officially published revisions to its Safeguards Rule, expanding many of the requirements applicable to dealerships.

The new requirements become applicable on Dec. 9, 2022, and NADA has developed several resources, including a written guide that can be found at and the webinar at:

Fair Credit Compliance
On Mar. 21, 2013, the Consumer Financial Protection Bureau (“CFPB”) issued a fair lending guidance bulletin to indirect auto finance sources (which the CFPB refers to as indirect auto lenders), stating “that certain lenders that offer auto loans through dealerships are responsible for unlawful, discriminatory pricing” and lender policies “that allow auto dealers to markup lender established buy rates and that compensate dealers [for originating credit contracts] in the form of dealer [participation]” create a “significant risk” of fair lending violations.

The CFPB, under the Biden Administration, has refocused its attention on dealers. Members should practice the process as outlined in the NADA Fair Credit Compliance Guide.

Dealer Attitude Survey
NADA initiated the Dealer Attitude Survey in 1985 to capture dealers’ opinions on key industry issues affecting dealers’ relationships with their manufacturers. Data collection for the NADA Winter 2022 Dealer Attitude Survey has ended with a 72% completion rate. The upcoming Summer 2022 Dealer Attitude Survey (DAS) Enrollment Schedule is as follows:

July 05, 2022
Survey Available Online

July 28, 2022
Last Day to Complete the Survey

July 29, 2022
Survey Data Collection Closed