Dealers who promptly handle threats to their business can avoid unfortunate misery.  

Here we’re talking about threats associated with failure to establish and then practice proper operational standards established by various regulatory entities.

No dealer consciously desires to put consumers, employees or the business at risk. Yet many do every day. This is not willful neglect of standards, but rather neglect brushed aside during endlessly busy days.

This is understandable but dangerous today, given increasing compliance regulations and regulatory actions against auto retailers.

Dealerships that goof up in this area are recent examples.

There was a case in Florida of a controller, sales manager and general manager embezzling $400,000 from a Florida dealership.

A New Mexico dealership settled an Equal Employment Opportunity Commission sexual harassment suit for $2 million.

Failure to properly protect workers using lifts, welders, grinders and other shop equipment and tools can result in Occupational Safety and Health Admin. violations of tens of thousands of dollars.

Already the influence of the Consumer Financial Protection Bureau on lenders and dealerships is resulting in fear and adjustment to many finance and insurance practices.

In most cases, managers who take time to learn about compliance regulations and put them into practice in their dealerships rarely become bad examples.

Accordingly, managers will want to review all internal compliance practices, including those that govern:

  • Employee wrongdoing, including coworker harassment.
  • Employee personal injury, including harm from equipment and practices common to the service department and body shop .
  • Consumer-facing practices, including those involved in sales and F&I.
  • Identity-protection practices, including those that safeguard consumers’ personal information as well as the dealership data.
  • Data-integrity practices, such as steps to prevent and thwart network hackers or breaches.

This is not exciting work for most people, but time conspires against laxness.

Assign regulatory compliance responsibilities to one or more staff members. Provide the resources to help them become trained and competent at this important duty. Identify organized and detail-oriented individuals who can push through others’ natural reluctance to cooperate.

Consider an outside resource. Good alternatives here are the dealership’s certified public accounting firm or an automotive compliance consultant who can bring the benefits and oversight of a compliance-management system.

If you manage this effort in-house, prepare a compliance master plan. This should describe and govern:

  • Quarterly reviews of hazardous waste, including eyewash stations; tire, oil and battery disposal manifests and Safety Data Sheets (SDS).
  • Written accounting (inventory) of hazardous chemicals.
  • A mandated dealership hazard waste program.
  • A written policy for and annual inspections of respiratory protection programs.
  • Training programs with regards to safety, hazmat, respiratory and other mandated programs.
  • OSHA Lockout/Tagout programs.
  • Trained personnel with regards to blood-borne pathogens
  • A written emergency evacuation process; and all pathways clear, exits clearly marked and clear, electrical panels free of obstructions, and fire extinguishers tested and marked.

Walk through the dealership. This important step will provide a holistic view of compliance practices. What are these practices and processes? If in F&I, what is the store’s process and monitoring practice for compliance? If in service, are equipment safeguards in place?

Inspect any documented processes and practices. What safeguards are in place to ensure compliance? For instance, are deal jackets always stored out of sight and the storage locked? Do chemicals, air bags, waste oil and the like carry necessary and mandated SDS?

Secure all data networks and related devices by using robust, always-on, self-monitoring network management. Off-the-shelf spam-, mal- and adware software is helpful, but more vigorous network management is likely required to keep ambitious hackers at bay.

Complying with government regulation is a big job, even for large dealer groups.

Former auto dealer and operator, Terry Dortch is president of Automotive Compliance Consultants, Crystal Lake, IL. Reach him at