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requirement of being ordinary and necessary is a question of
fact. Id. at 115.
A dealership's business encompasses a wide range of
activities beyond the mere sale of a vehicle. The arrangement of
financing of sales on an installment plan is a familiar aspect of
a dealership's business and the offer of credit insurance with
respect to such sales is proximately related thereto. Of the
3,112 new and used cars purchased from Classic, 1,888 were
financed with dealer-arranged financing. Of the 5,290 cars sold
by Berger, 2,561 were financed with dealer-arranged financing.
With each car financed, the dealer uses the financial
institution's installment sales contract forms. Of four
installment sales contracts in the record, all offer the option
of credit insurance. Credit insurance is not always purchased by
the customer and is available for purchase elsewhere.
Nevertheless, it is clear from the record that both the
dealerships and the financial institutions expect someone at the
dealership to be able to explain and offer credit insurance to
the customer while the customer is filling out the installment
sale purchase agreement.
The commissions for credit insurance are an "ordinary"
expense. The parties have stipulated that virtually all new
motor vehicle dealerships in Michigan and other states offer
credit insurance to their customers who finance their
automobiles. We have noted that the offering of credit insurance
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Last modified: May 25, 2011