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Sinckler answers car dealers’ call

Added by Marlon Madden on December 19, 2017.
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Government today moved to Parliament to raise the chargeable value from $55,000 to $60,000 on motor vehicles, following complaints from car dealers that the recent hike in National Social Responsibility Levy (NSRL)had driven the cost of mid range vehicles out of the reach of ordinary Barbadians.

In tabling the Excise Tax (Validation of Tax) Motor Vehicles Bill in the House of Assemblythis afternoon, Minister of Finance Chris Sinckler sought to assure that Government would still collect its share of revenues from the NSRL, which was increased from two to a whopping ten per cent on July 1 this year.

However, it is expected to result in an immediate lowering of revenues from excise taxes on motor cars even though Government expects to more than make up for the expected shortfall by way of higher sales of mid range vehicles, which, with the increase in the NSRL, were said to costing as much as some luxury range vehicles.

“So to avoid that effect the dealers and the Barbados Revenue Authority . . . said the way you adjust that, the way you avoid that problem is to move the chargeable value up from $55,000 to $60,000. So you change the band for the vehicle and allow then the landed value on the excise, in spite of the increase in the NSRL, to remain basically within the range of what we would call a mid-range affordable vehicle,” Sinckler explained.

“That, the BRA has advised, can be safely done without compromising any of the revenue . . . to the Government and interrupt any of the projections which we have made unduly. So having seen that, the Ministry of Finance said once we can get what we have projected to get, then we see no reason why we could not allow the chargeable value to go up from $55,000 to $60,000,” he added.

Pointing outthat such a move was done in the past, Sinckler said it was never Government’s intention to dramatically increase the cost of vehicles by way of taxes.

The rate of excise on imported vehicles is calculated based on the chargeable value which is based on the cost of insurance and freight plus import duty, plus NSRL and Value Added Tax if applicable, plus the size of the engine.

Currently where the vehicle engine size does not exceed 1,600cc and the chargeable value is below $55,000, then the excise charge is 46.95 per cent. If the capacity is less than 1,600cc but the chargeable value is greater than $55,000 then the excise rate is 64.35 per cent.

“If the engine capacity is more than 1,600cc and the chargeable value does not exceed $55,000 the excise tax moves to 76.34 per cent. And where the engine capacity is more than 1600cc but less than 1800cc and the chargeable value exceeds $55, 000, the excise tax then moves to 93.7 per cent,” the Minister of Finance said, as he gave an idea of the taxes that were being paid.

“Finally, where the engine capacity is over 1,800cc and the chargeable value exceeds $55,000, the excise tax rate moves to 120 per cent,” he added.

The resolution, which was approved, also called for a validation of previous adjustments, which Sinckler pointed out were done under administrative order from his ministry.

“On investigation the Chief Parliamentary Council thought it was tidier and more legally certain to have this enshrined in legislation by way of effecting an amendment to the Act and adjusting regulation by way of order to ensure there be any avoidance of doubt and we agree,” he said.

2015 Nissan Leaf in front of Longfellow Bridge, Boston [photo: John Briggs]

2015 Nissan Leaf in front of Longfellow Bridge, Boston [photo: John Briggs]

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Yet another study has revealed that many dealerships across the United States still don’t prioritize electric cars and haven’t prepared for their growth.

The latest report showed dealerships still practice the same unhealthy habits uncovered in earlier studies, including a lack of electric-car inventory, little to no marketing, and an apparent lack of education on local and national incentives.

The goal was to assess how dealers will handle a buyer base that will only grow in the future as electric cars become a more feasible, more popular mode of personal transportation.

The firm deployed mystery shoppers to the highest-selling electric vehicle markets in the U.S. Tesla aside, the outlets for every brand on the market did not perform particularly well.

Above all, the study found major inconsistencies across dealerships.

2017 Chevrolet Bolt EV Premier and 2017 BMW i3 electric car, Aug 2017 [photo: Tom Moloughney]

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One dealer might provide excellent information and have the knowledge to help a buyer choose an electric car.

But another dealership might utterly dismiss electric cars and default to pushing a vehicle that was easier to sell, such as a hybrid or a gasoline-only car.

The study found many dealers held the unspoken belief that shoppers must be prepared for a less-than-stellar shopping experience if they insisted on an electric car.

One example was the lack of physical inventory at the dealership itself. Many salespeople urged mystery shoppers to accept the electric car that was presently available, instead of making the effort to search for the car requested.

In some cases, the salesperson didn’t offer test drives, questions on the cars went unanswered, and—more often than not—electric cars were not on display in the dealer’s showroom.

The study echoes advice from the Sierra Club aimed at helping automakers make the sale of electric cars more seamless, and it starts with training.

2018 Chevrolet VoltEnlarge Photo

Without a knowledgeable sales force, many dealers will default to what they know best: a traditional car powered by an internal-combustion engine.

The entity also said allocating more inventory outside of popular electric-car states like California is essential.

Potentially the biggest draw for electric cars—federal and other tax credits or incentives—should be explained in full, too.

It’s not just one brand either; the study looked at 11 separate brands and found inconsistencies in every experience.

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Car Dealers Have Real Problem With Sexist, ‘Testosterone-Charged’ Culture

The National Automobile Dealers Association’s annual workforce study has yet to be released, but it reportedly has highlighted an alarming trend in the automotive industry.

The NADA has found that women are underrepresented, and fleeing the industry much quicker compared to male workers, and it is costing dealers a lot of money, according to Automotive News, which has seen the survey’s results. What’s more, ESI Trends, which conducted the NADA’s study, suggests that a lingering culture of sexism is to blame.

In 2016, dealers in the United States saw a turnover rate of 46 percent among all female employees, and 96 percent among female sales representatives — compared to 41 and 71 percent, respectively, among males. ESI Trends president Ted Kraybill, for perspective, claims turnover represent an $8 billion problem for the industry as a whole, and costs dealers an average of roughly $20,000 every time a sales position is vacated.

“There will be no real progress as long as the majority turn a blind eye and deaf ear to the macho, testosterone-charged sales culture that disrespects women customers and co-workers,” Kraybill told Automotive News.

A separate Automotive News survey revealed just how toxic the environment can be, with 65 percent of women at new-vehicle dealers reporting they have experienced unwanted sexual advances, and 45 percent claiming they have missed out on opportunities for advancement because of their gender.

To prevent that type of behavior from permeating their dealership, Jeff and John Morrill, owners of Planet Subaru in Hanover, Mass., have tried to hire an equal number of men and women. Although they admit their workforce isn’t an entirely even split, females make up 30.3 percent of their staff, and 35.5 percent of their sales consultants.

“This is an industry where men still occupy nearly all the positions of power,” Jeff Morrill said. “So until there are more women in those positions of power, it’s really incumbent on the men to bring more women into the business so those women can be part of the decision-making in the future.”