Private Settlement Case Prompts Proposed 29-Point Inspection Action for Dealers

Recently, a case being finalized to settle a dispute for an undisclosed amount is prompting a call for change.

The case centers around a case in which two individual tire blowout situations on a single car that had been maintained by the selling dealership spurred controversy. Though the car dealership was legally liable for the failed tires, it was not technically responsible for the unfortunate circumstances. Currently in most states, the Department of Transportation (DOT) does not review issue dates on tires. This was a major point of consideration in the case of the blown out tires, since the tires in question were actually several years older than the recommended acceptable selling date.

Bottom line for dealers: until the DOT implements more stringent used car inspections as they related to tire issue dates, dealers will continue to be liable for a process over which they have little or no control.

Not only is this a safety issue for consumers but it is a risk management and liability issue for used car dealers.

HBK CPAs & Consultants’ Dealership Industry Group is leading a charge to sanction a mandatory 29-point inspection caveat to each tire sale transaction for car dealerships.

Call HBK today at 317-886-1624 or contact team leader Rex Collins at rcollins@hbkcpa.com directly to learn more about how this matter could impact your dealership.

About the Author(s)
Rex is a Principal of HBK CPAs & Consultants and directs the firm’s Dealership Group. He has worked extensively in the dealership industry since 1984 as a department manager, a general manager and an owner, as well as providing tax, accounting and operational consulting services exclusively to dealers as an independent CPA. This experience includes working closely with hundreds of dealers from coast-to-coast since 1987 on creative tax planning and financial statements issues. He provides clients with a wide range of transaction work services, and consults for them in specialty areas such as operations, government regulatory compliance, valuations and M&A feasibility studies. Rex is active in many professional associations. He is the current Chairman of the BDO Dealership Industry Group, contributes articles and commentary to dealership industry publications, is frequently called upon to speak to industry associations and conferences, provides expert testimony, and is regularly quoted by industry and the general media.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

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