HOW BAD CAN IT BE?

How Bad Can It Be?

In the event of a manufacturer’s audit, can the manufacturer really punish the dealer? Sure, it might cost you the dealer a little (or a lot) of money, but can it be THAT bad? See for yourself. On a 2nd audit, if there are false findings (like ineligible or retained rebates), with an error rate of just 2%, here are the penalties from the manufacturer:

1 – Business Counseling Meeting with Regional Sales Manager; if the total chargeback and assessment exceed $50,000 or
if Ford Motor Company management deems it necessary, unless otherwise required by state law.

2 – Dealer Principal and/or General Manager (with Fii authority) must sign all applicable forms (A,X,Z & D Pricing Sheet and
Agreement form; Customer Cash Payment Authorization forms – CCPA; Commercial Connection Proof of upfits, etc.)

3 – The dealership will be ineligible for awards or recognition for the following:
President’s Award
Lincoln Leaders
Ford One Hundred Club
FCSD Premier Club
Sales/F&I/CPO for both Employee Excellence and Lincoln Leaders of Excellence
Action 3 does not apply in the following circumstances:
— If the Dealer Principal self-reports false activities in writing to the Regional Manager prior to notification of the Company audit
process. Dealer should report VINS and amounts involved to Regional Manager who notifies GAO to process the chargeback.

Actions 2 & 3 are in effect for 12 months from audit close.

4- Dealer Charges
— Improper incentive claims or incentives given to ineligible customers will be charged back in Vincent
— For A,X,Z and D-Plan sales to ineligible customers or ineligible claims, the Plan commission will be charged back
— For Plan rules violations with sales to eligible customers, the chargeback will be the lesser of $200 or the commission.
In addition, dealers will be required to refund any customer overcharges (including excess DOC fees) and retained rebates.

5 – Regional Sales Manager forwards a recommendation for termination of the dealership’s Sales and Service Agreement.
If a notice of termination is not issued, a follow-up audit may occur in 6-24 months

6 – Dealer Principal and/or General Manager (with Fii authority) must complete online training. It is highly recommended that
dealership personnel with incentive claiming capability/access also complete online training

7 – Additional franchise opportunities are suspended for 12 months from audit close.

8 – A follow-up audit may occur in 6-24 months.

9 – A, X, Z and D-Plan commissions will be reduced to 50% for 6 months. Alternatively, dealers may choose to pay a
surcharge of 50% of the total Plan chargeback & assessment amount. For follow-up audits, commissions will be reduced
by up to 100% for up to 12 months, and the surcharge option is not available.

If a dealer averages 2 false findings–a DPLAN or XPPartner deal without all documentation, or an accidental rebate that got claimed without being in the deal (even those Fast Cash certificates), only 2 out of 100, all of the penalties above can be levied–in addition to any and all financial penalties and charge backs.

For a no-cost, no-obligation discussion–especially if you have had a previous audit– call or email us today! 1-877-433-1792 / bhughes@dewittlane.com