Federal regs for auto dealers costing US economy more than $10B, study says

Big ChiefBig Chief Senior MemberPosts: 32,990 Senior Member
Over regulation is killing businesses and is getting much worse lately I think it was JasonMPD who was thinking of opening a small business. I don't know about all the regs for them, but here is a sample of why cars cost so much and how compliance can really get ignorant. Federal regs seem to be the worst, but you have state and local ones that put up a lot of hurdles before you even get started or add new ones even after you have in business for many years.

I can see safety for customers and employees and common sense environmental guidelines, but some of this stuff is absurd.


http://www.foxnews.com/politics/2014/06/03/federal-regs-for-auto-dealers-costing-us-economy-more-than-10b-study-says/?intcmp=latestnews

"Federal regulations for auto dealers are costing America's economy more than $10 billion in lost sales and employment each year, according to a new study conducted by the Center for Automotive Research provided to Fox News.

The study finds that the nation's dealers are being hit with more than $3 billion in regulatory costs each year - with the average dealership incurring about $182,754 in annual regulatory costs, representing roughly one-fifth of the average dealership's net profits.

"We are basically being regulated to death,” said Geoffrey Pohanka, chairman of the Pohanka Auto Group. Pohanka doubts that his grandfather would be able to start up this 100-year-old Washington, D.C. area family business in today's regulatory environment. He said 50 staffers at his group devote some portion of their day to regulation compliance.

He cited just a few examples.At his new northern Virginia Honda dealership, a state inspector recently found that his showroom roof needed to drain storm water more slowly to comply with state storm water drainage regulations. "The problem with that is that the roof is not designed to hold the extra weight from this water,"he said. "What would inevitably happen is these roofs would either cave in or we would get massive leaks."

His finance teams wrestle daily with Justice Department disparate impact regulations designed to prevent discrimination in lending. But the rules are vague. "They have not described to us exactly what action we must take," he said. "It's unintentional discrimination that we're doing, so we have to have a system in place to make sure you're not unintentionally discriminating against the consumer."

While an applicant with a sketchy credit history can get a car loan, Department of Homeland Security regulations stipulate a car-buying terrorist must not get one. The dealership must report to DHS any potential car buyer who might fit a terrorist profile. But the regulations are not easy to interpret, a dilemma exacerbated by the fact that terrorists tend not to announce their occupation when filling out lending applications.

In another instance of what Pohanka believes to be bureaucratic ineptitude, used car certifiers at his Honda dealership in Maryland were flunking a state-mandated test. One question in particular stumped his computer-proficient technicians. It asked what a "drag link" was.

Drag links are steering components that have largely been phased out of most cars for 30 years or more. Knowledge of them serves little purpose in contemporary car maintenance, and reflects, in Pohanka's view, the obsolescence of the state exam.

Forrest McConnell III, chairman of National Automobile Dealers Association, said car buyers are generally unaware of how the burden of regulation compliance adds to the cost of a car. "They would be shocked to know that 21 percent of the cost of the car is just what the manufacturer's cost is for compliance, “ he said. "That takes money out of their pockets honestly and hurts jobs,too."

Regulation is increasingly limiting the design perimeters for new cars, too. Testing has revealed that serious injury can result when a pedestrian's head strikes the hood. The hood itself acts as a cushion as it crumples, but that cushion effect ends as the hood impacts the engine block.

The new regulations require most new cars have a three-inch space between the hood and the engine block.

But designers can't just raise the hood line three inches without throwing the entire design out of whack. The windshield and windows must be smaller. The lip, where the sheet metal rises to the base of the windows, must be higher. The seats, too, must be higher so the driver can see over the higher hood, andthe wheels have to be bigger, lest they appear out of scale with the new proportions.

It's all money well spent, said safety expert Clarence Ditlow of the Center for Auto Safety.

"The cost of regulation saves lives, prevents injuries, prevents paralysis and overall the government takes into consideration and cost benefit already and if anything, there's too little auto regulation and not enough," he said.

Fox News' Anne Marie Riha contributed to this report"

http://www.foxnews.com/politics/2014/06/03/federal-regs-for-auto-dealers-costing-us-economy-more-than-10b-study-says/?intcmp=latestnews
It's only true if it's on this forum where opinions are facts and facts are opinions
Words of wisdom from Big Chief: Flush twice, it's a long way to the Mess Hall
I'd rather have my sister work in a whorehouse than own another Taurus!

Replies

  • BAMAAKBAMAAK Senior Member Posts: 4,266 Senior Member
    I agree, to many gov't regs for everything. Autodealers don't get a lot of sympathy though, the have a history of being shady to put it nicely.
    "He only earns his freedom and his life Who takes them every day by storm."

    -- Johann Wolfgang von Goethe, German writer and politician
  • zorbazorba Senior Member Posts: 19,305 Senior Member
    Remember, the State knows what's best.
    -Zorba, "The Veiled Male"

    "If you get it and didn't work for it, someone else worked for it and didn't get it..."
  • AntonioAntonio Senior Member Posts: 2,329 Senior Member
    Same over-regulating nanny-State stupidity is "raining" down to us in the 3rld. world; current commie government has managed to stop many foreign investments that MIGHT have environmental issues and our former growing economy is decelerating at a frightening rate. At least we can relatively easily bribe ourselves out of trouble in most "small" everyday cases (And that's the immediate side effect of over-regulation: Corruption) but things are starting to get ugly.
  • USUFBUSUFB Senior Member Posts: 830 Senior Member
    It's for the children. And puppies.

    And if you disagree, you're a racist.
    Sometimes, I lie awake in bed at night wondering "Why the heck can't I fall asleep?"
    NRA Life Member
  • alphasigmookiealphasigmookie Senior Member Posts: 8,662 Senior Member
    Don't forget all the state regulations that have been put in place by the existing auto dealers (who also often tend to be some of the biggest most powerful business interests in many state and local governments) to basically prevent new competition from entering the market such as the regs in many states banning Tesla from selling their cars.
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • alphasigmookiealphasigmookie Senior Member Posts: 8,662 Senior Member
    If you've ever seen the Potomac after even a minor rain storm you'll understand why the stormwater rules were put in place. When there's almost nothing but concrete for over 100 square miles it's pretty obvious why there are issues. That said, it's still a PITA to deal with all the regs, even if most of them have good reasons behind them.
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • RugerFanRugerFan Senior Member Posts: 1,795 Senior Member
    I think most of what was mentioned in the article is exclusive to D.C.. My wife works for a new car dealer here in MS. She's never mentioned anything about reporting potential terrorists to DHS. Also, I don't think the dealer would be responsible for any "lending discrimination" unless the dealer is doing the lending. All the dealer does is take the customer's information and submit it to the lender. Most dealers do business with several lenders.
  • BigDanSBigDanS Senior Member Posts: 6,796 Senior Member
    If you've ever seen the Potomac after even a minor rain storm you'll understand why the stormwater rules were put in place. When there's almost nothing but concrete for over 100 square miles it's pretty obvious why there are issues. That said, it's still a PITA to deal with all the regs, even if most of them have good reasons behind them.

    It's not the run off from the concrete, it's the city and its residents and habits. The area is dirty and so the run off is dirty. Allowing it to drain into the river slowly is in my opinion no better than allowing it to drain quickly.

    WE struggle with this in Miami. My home elevation is 12 or 15 ft , I think, with the majority of the county at 9 feet or less. The run off is full of our living debris, from motor oils, to cigarette ash and everything you can imagine. Much of it drains into the ocean via a long pipe.

    D
    "A patriot is mocked, scorned and hated; yet when his cause succeeds, all men will join him, for then it costs nothing to be a patriot." Mark Twain
    Alcohol, Tobacco, Firearms and Explosives.... now who's bringing the hot wings? :jester:
  • zorbazorba Senior Member Posts: 19,305 Senior Member
    You know what that road to Hell is paved with...
    -Zorba, "The Veiled Male"

    "If you get it and didn't work for it, someone else worked for it and didn't get it..."
  • zorbazorba Senior Member Posts: 19,305 Senior Member
    USUFB wrote: »
    It's for the children. And puppies.

    And if you disagree, you're a racist.
    This forum seriously NEEDS a like button! :applause:
    -Zorba, "The Veiled Male"

    "If you get it and didn't work for it, someone else worked for it and didn't get it..."
  • AntonioAntonio Senior Member Posts: 2,329 Senior Member
    Don't forget all the state regulations that have been put in place by the existing auto dealers (who also often tend to be some of the biggest most powerful business interests in many state and local governments) to basically prevent new competition from entering the market such as the regs in many states banning Tesla from selling their cars.


    Didn't know that. Shame on them since after seeing those beauties last year at a small showroom in a Miami mall, I almost became convinced that a "car" can be other than a 2-door Detroit-made V8.
  • horselipshorselips Senior Member Posts: 3,626 Senior Member
    For the umpteenth time, I'll say it again. The political-economic climate today calls for the unionization of economic producers - manufacturers, managers, entrepreneurs, professionals - in short, all of the means of production except labor, and engaging in massive, universal, corporate civil disobedience, capable of completely collapsing the economy and bankrupting the federal and all state and local governments, until the administration withdraws from regulation and restores free market capitalism, nationwide right to work, and a balanced budget. Freedom is the solution to almost every problem.
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