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Automobile dealerships need a winning legal strategy

Hubbard Snitchler & Parzianello

The automobile industry remains a critical part of the economy in Southeast Michigan.

Detroit is the home for several major automobile manufacturers, but it also has many smaller auto dealerships.

The income from the business of selling new and used cars to the millions of people in the area is also an important part of Detroit’s economic life The income from dealerships provide a living for many people and, for some, are the source of their fortune.

But building up and maintaining a successful enterprise in automobile sales is difficult on many levels. In addition to a business strategy, aspiring dealerships will also need a well-thought and comprehensive legal strategy.

Auto dealers have to comply with many federal and state laws

In addition to following employment laws and other rules and regulations which apply to businesses across the board, auto dealers have several laws that they will have to follow which are somewhat niche to the automobile industry.

For example, when selling used cars, dealers will have to follow the Federal Trade Commission’s Used Car Rule, a regulation which requires that the dealer accurately disclose whether a warranty is included with the purchase of a used car and the terms of that warranty.

Auto dealers who extend credit to their customers will also have to follow several additional federal laws related to credit scores and lending.

Dealers will also have to keep track of several contracts

Those in auto sales will likely also have to make sure they are tracking, and following, the terms of several contracts. For example, they will probably have to negotiate a dealership or franchise agreement or may have a question about what an existing agreement requires.

They may also have to work with other contracts, including vendor agreements or a commercial lease.

An experienced business attorney with a background in the automobile industry can help a dealership navigate the many legal and contractual issues that will impact it.

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