Texas Dealer, February 2015

In This Issue: – Market Survey of Car Buyers – Making a Floor Plan Work for You – Michael W. Dunagan on Timely Title Transfers

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2015 TIADA Board of Directors President Brent Rhodes/Fiesta Motors 5150 Industrial Way Drive Buda, TX 78610 Office: 512.312.2201 Email: brent@fiestamotors.net chairman of the board Michael Thomasson/Mike Carlson Motor Company 264 Exchange St. Burleson, TX 76028 Office: 817.366.9578 Email: mthomasson@mcmcauto.com Secretary Kathrine Tolsch/CICO Auto Sales 11050 Harry Hines Blvd.

Dallas, TX 75229 Office: 214.352.9282 Email: cicoauto@verizon.net Treasurer Greg Zak/Dixon Motors 7902 North Freeway Houston, TX 77037 Office: 281.931.1300 Email: gzak@windstream.net Vice President, West Texas (Region 1) James Hobson/H-Town Motors 3714 Dyer Street El Paso TX 79930 Office: 915.564.9797 Email: htownmotors@sbcglobal.net Vice President, Fort Worth (Region 2) Tommy Gregory/Abilene Used Cars Sales Inc. 497 E.S. 11th Abilene, TX 79602 Office: 325.676.8000 Email: aucsinc@sbcglobal.net Vice President, Dallas (Region 3) Kevin Mims/VP Auto Sales 2921 S. Garland Ave. Garland, TX 75041 Office: 972.864.1300 Email: kevinm@vpautosales.com Vice President, Houston (Region 4) Juan Sabillon/Mi Tierra Auto Sales 7935 Gulf Freeway Houston, TX 77017 Office: 713.644.2446 Email: brentfordct@yahoo.com Vice President, Central Texas (Region 5) Robert Beck/Stop N’Drive Motors 711 N. General McMullen Dr. San Antonio, TX 78228 Office: 210.432.1101 Email: stopdrive@texas.net Vice President, South Texas (Region 6) Dan Keetch/Keetch Motors 1010 S. Staples Corpus Christi, TX 78404 Office: 361.882.3541 Email: dankeetch51@yahoo.com Vice President At Large Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 Office: 713.641.0980 Email: ryan.winkelmann@sbcglobal.net Vice President At Large Trey Crouch/Trey Crouch’s Wheels On Credit 636 E. Business 83 McAllen TX 78501 Office: 956.972.0700 Email: trey@wheelsoncredit.com TIADA Executive Director Jeff Martin 9951 Anderson Mill Rd., Suite 101 Austin, TX 78750 Office Hours M-F 8:30am - 4:30pm 800.442.5944 • Fax 512.244.6218 jeff.martin@txiada.com

Volume XV

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Issue 2

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Fe b r u a r y 2 015

texasDealer

5 Officers’ Message

contents

by Greg Zak, TIADA Treasurer

6 On The Cover: “Single Sticker” Goes Into Effect

by Danny Langfield

8 TIADA Member Application 10 Legal Corner: Timely Transfer of Titles Requires Diligence

by Michael W. Dunagan

12 Upcoming Events 14 2015 VIP Card Auction Directory 17 New Members 19 Market Survey of Car Buyers

by Somir Paul

23 News & Notes 24 Excerpts from The CARLAWYERS©

by Thomas B. Hudson and Nicole Frush Munro

26 January 2015 Crossword Answers 28 Making a Floor Plan Work for You

by Karen Millwood

32 Legislative Bulletin 39 Local Chapters 40 TIADA Scholarship Application 42 Regulation Matters: A Few Quick Hitters

by Danny Langfield

46 Behind the Wheel

by Jeff Martin

What’s happening at w w w . t x i a d a . c o m ?

The Legislative Action Center, found under the Advocacy tab of the website, includes breaking news and information related to the current Texas legislative session. Find the names and contact information of your elected officials, track bills and get the inside scoop on the issues that could impact your business and industry.

The Editor of the Texas Dealer magazine is Teresa Orkun, Marketing Communications Coordinator of TIADA. To change your address for subscription and/or for other TIADA products, call the TIADA state office at 800.442.5944, 512.244.6060 or fax 512.244.6218. E-mail: info@txiada.com. New Membership/Subscriptions: If you are a member of TIADA, you may receive this magazine free of charge. Membership year runs from Jan 1 to Dec 31. Back issues are available for $20 each subject to availability. Send a check or money order, along with your name and mailing address to TEXAS DEALER, Attn: Back Issues, 9951 Anderson Mill Rd., Suite 101, Austin, TX 78750. Sorry, no billing. Notice to all members concerning services and products: TIADA was established in 1944 to develop professional standards of service and conduct for the independent auto industry. Opinions expressed herein are not necessarily those of the TIADA management, the Board of Directors or the membership. Likewise, the appearance of advertisers or their indemnifications of TIADA does not constitute endorsement of the products or services featured.

officers’ message Advertising: Track It or Lose It

D

ealers spend countless dollars on advertising within various mediums—from TV commercials, infomercials, radio, on-sight radio shows, newspapers and magazines, to neighborhood and community papers, billboards, Internet, Internet lead generators, and the list goes on and on.

Salespeople at each of those advertising venues will tell you that clients are selling a lot of cars from their ads so you should advertise with them as well. But, if you want a prime-time slot, that special page in the newspaper or magazine, or the top spot on Google search, well… that’s going to cost you more than the price they initially quoted you.

There are some dealers out there who are spending as much as $1,000 in advertising per car sold. Yes, you heard me right. Insane isn’t it? Some dealers in my 20 group spend $0 per car sold on advertising and sell a lot of cars every month. So, what is the right answer? $1,000 per vehicle sold or $0? As a reference point, according to NCM, the 2014 benchmark average for advertising per vehicle sold is $172.

Well, it doesn’t take a mathematician to figure out that the person who spends $1,000 per car has to gross more per vehicle sold than the person who spent $0 in order to make a fair comparison. Both models can work. But the dealer who spends $1,000 per vehicle sold needs to ask himself a question: Where are sales and customer traffic coming from?

If you are not tracking every phone call, every walk-in, every Internet lead, and certainly every sale, then how do you know where your advertising dollars are being most effective? I’m going to stop you before you even have the thought, “But you have to advertise so people will think of you when they’re ready to buy.” If you want to stay with that thought, then let me give you my address so you can mail me

February 2015

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by Greg

Zak

Dixon Motors (Houston) TIADA treasurer

some of those advertising dollars. I will gladly take your money just like all of those advertising sales people. If you don’t have a plan for how you will track advertising dollars spent, you’re not ready to advertise.

If you advertise with a specific newspaper or radio station, track how much traffic you’ve received from this venue over a 90-day period. If you see that you are not generating a lot of sales through this media, then don’t continue putting money in a black hole, as they say. Be quick to cut the advertiser. A good way to measure your dollars spent per car sold is a national benchmark number from NCM, NABD or Leedom. I’m going to pick just a minute on those dealers who blanket advertise, covering every form of media there is. I can tell you that those dealers don’t have a clue where their customers are coming from.

It’s a waste of money, and a lot of money at that.

In our dealership, we track every touch of a customer. Over the years, we have spent less and less on advertising. Our primary focus today is working with our customers on referrals. We have determined that repeats and referrals are the best effort we can spend in the way of advertising—word-of-mouth advertising, that is. And you know what? Our sales have increased over the years because of this decision.

If you are advertising with a magazine or Internet lead generator and it is working for you, by all means don’t stop. Again, just make sure that you track all of your traffic and sales so you know for sure where they are coming from.

I’ll use an example to help put this into perspective because that always helps me. What would you say if one of your kids came to you and said, “Hey, I’m going to go out and eat with my friends. I’m not sure where we’re going. Can you give me a $1000?”

5

on the cover

by Danny Langfield

TIADA Deputy Director

“Single Sticker” Goes Into Effect

M

arch will bring an enormous change to the process of inspecting and registering vehicles in the state of Texas, both for dealers and for the motoring public at large. As of March 1, 2015, the state will no longer be issuing inspection stickers — a vehicle’s registration sticker will serve as proof of both inspection and registration.

According to TxDMV, there are two general steps for dealers regarding the single sticker initiative, dubbed, “Two Steps, One Sticker.”

The first step is inspection. Dealers are still required to ensure that vehicles riding on a buyer’s temp tag have a current inspection (vehicles riding on a dealer temp tag are still not required to have current inspection). Once a vehicle has been inspected, the results will be entered into the state’s inspection database.

The second step is registration.

When a dealer goes to transfer a vehicle at the county, the vehicle’s inspection status will be electronically verified and the buyer will be issued

6

a registration sticker to serve as proof of inspection and registration.

The date on the registration sticker is now the expiration date for both inspection and registration.

How will I know if a vehicle needs to be inspected before it is transferred?

at the time the county transfers it, no new inspection will be required.

IMPORTANT EXCEPTION: if the inspection is due to expire the same month the vehicle is being transferred, a new inspection WILL be required. For example… (see Fig. A)

What about the

TxDMV has stated that a inspection fees? tool will be made available on Instead of paying the entire fee to www.TwoStepsOneSticker.com the inspection station, part of the fee which will allow dealers to check will be paid at the time of inspection, the date of last inspection. Dealers and the remainder will be paid at will enter the VIN into the look-up registration. According to TxDMV, tool and it will return information the cost of neither inspection nor about the type of inspection perregistration will increase. formed, the date of last inspection, Inspection fees will continue to and any associated fees. be an acceptable line item charge on The agency has also indicated that a retail installment contract, prothe tax office will be accessing this vided documentation of the actual same database to determine the Month Month Inspection vehicle’s inspec Inspection Expires of Transfer Required? tion status.

June (or earlier) July YES Generally, July July YES as long as the

August (or later) July NO vehicle has current inspection (Fig. A) T e x a s

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February 2015

expense to the dealer is retained (receipt from the inspection station). As always, a dealer may only include the actual charges incurred.*

What about vehicles riding on a buyer’s temp tag?

As stated above, vehicles being operated on a buyer’s temp tag will still be required to have current inspection. However, TxDMV has indicated that law enforcement will be made aware that such a vehicle is NOT required to have any windshield sticker. TxDMV strongly recommends that the printed vehicle inspection report be kept in the glove box until the plates and sticker are mounted.

What about vehicles riding on a metal dealer’s plate?

Similar to a buyer’s temp tag, vehicles being operated on a metal

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dealer’s plate will still be required to have current inspection. Again, law enforcement is supposed to be aware that such a vehicle is NOT required to have any windshield sticker. As with a buyer’s tag, although it is not required, TxDMV strongly recommends that the printed vehicle inspection report be kept in the glove box of any vehicle riding on metal dealer plates.

How will this be handled once webDEALER has been implemented for used vehicles?

As many of you know, webDEALER is an online system that will allow dealers to transfer titles from any internet-connected computer (see the article, “Coming Soon: webDEALER for Used Vehicles,” from the November 2014 issue of this magazine). TxDMV states that webDEALER will calculate all fees

due at the time of title and registration, including the state’s portion of the inspection fee, as well as allow for a manual verification of inspection.

Additional changes starting March 1, 2016

Once “single sticker” has been fully implemented (expected to be March 1, 2016), a used vehicle sold by a dealer will be required to have been inspected in the 180 days preceding the sale date in order to be registered. (In a private sale, or registration renewal, the time period will be 90 days.)

Dealers are encouraged to visit www.twostepsonesticker.com for additional information.

*Look for an article in the March issue of this magazine discussing the inspection fee, the retail installment contract and possible changes to TT&L calculations.

7

TIADA Membership Application

2015

Business Name: ____________________________________________ Select one:

Dealer Member

Associate Member

Contact Person: ____________________________________________ Address: __________________________________________________ City: _________________________________________

2015 TIADA Membership Dues:

State: _______

Zip: __________________ County: _____________________________

$425 (Dues include NIADA membership)

E-mail address: _____________________________________________ Phone: _______________________ Fax: ________________________ Dealer P Number: ___________________________________________ Who referred you to TIADA? __________________________________ Mailing Address (if different from above): __________________________________________________________ City: _________________________ State: _______ Zip: ___________

PLEASE INDICATE PAYMENT METHOD: Check or Money Order payable to TIADA Check # __________ Credit Card Card Number: __________________________________________________ Expiration Date: ____________ Monthly Payments - $100 initial payment & $29.50 per month Via Credit Card (Please enter card information above. Authorization Agreement required - contact state office) Via Bank Draft (Authorization Agreement & voided check required - contact state office)

Mail or Fax Application To: TIADA Membership Services, 9951 Anderson Mill Rd., Suite 101, Austin, TX 78750 FAX 512.244.6218

www.txiada.com

512.244.6060

800.442.5944

Dues are not deductible as charitable contributions for income tax purposes but may be deductible as miscellaneous itemized deductions, subject to IRS restrictions. It is estimated that 20 percent of your dues dollars is used for lobbying activities and is therefore not deductible.

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legal corner

Timely Transfer of Titles Requires Diligence

W

hen the e-tag system was implemented a few years ago, the mandate that titles be timely transferred on retail sales became even more critical than it was before. The keystone of the revised temp tag scheme is the online reporting of all retail sales that occurs at the time of the sale, making information instantly available to the state as of the date of the sale. Prior to the implementation of e-tags, the first notification of the retail sale of a vehicle available to the state was the actual transfer of title at the county tax office (or, possibly, a consumer complaint to the Texas Department of Motor Vehicles (TxDMV)).

An article that appeared in the December 2014 issue of TIADA’s Texas Dealer listed the top 10 dealer violations handled by TxDMV. According to Ray Willoughby, Managing Attorney of the TxDMV Enforcement Division, the failure to timely transfer title was again the number one violation in terms of complaints processed.

Often, TxDMV becomes aware of a late transfer when a consumer files a complaint about dissatisfaction with a dealer for such things as the dealer’s refusal to undo a deal, or to make a repair, or because the temp tag has expired and the metal plates haven’t been obtained.

In compiling information for the complaint, TxDMV acquires information about the transfer (or nontransfer) of the title. TxDMV takes the position that timely transfer is strictly and absolutely required, and no excuses are tolerated.

10

by Michael

Based on many years of representing dealers in legal and administrative actions involving title problems, and in observing the TxDMV violation reports, I have concluded that late transfer (and in some cases, failure to transfer) violations can be generally put in three categories: (1) Outlaws, thieves, and scofflaws who have no intention of following the rules; (2) Dealers who, while being basically honest, just can’t seem to take care of business; (3) Diligent, honest dealers who transfer over 99 percent of their sales in a timely fashion, but who, despite their best efforts, occasionally have one fall through the cracks or have trouble with a late title coming in.

W. Dunagan

TIADA general counsel

TxDMV takes the position that timely transfer is strictly and absolutely required, and no excuses are tolerated.

While those in the first two categories get little or no sympathy from me, I feel for the dealers in the third. And, since dealers in the first two categories are unlikely to read this, I’d like to offer some suggestions for those in the third category. (At one time in the ancient past, some BHPH dealers were late in transferring because they were required to advance all sales tax at transfer, and they were waiting to collect additional payments to cover

the tax. Deferred sales tax eliminated that excuse.)

The problem of late filing of titles for dealers in the third category could be totally eliminated by making one change in how business is done: Don’t sell a vehicle until the title certificate has come in.

Assuming that that isn’t going to happen, some amount of planning is necessary to handle situations when titles are late coming in to prevent the problem from escalating.

My recommendation to the dealer who is willing to sell a vehicle before the draft or title arrives has always been to be prepared to address the issue with the buyer if the title is late. Files should be monitored to flag approaching transfer deadlines, so that time is allowed for the extra efforts needed to track T e x a s

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February 2015

down the titles. Instead of ignoring these problems, or waiting for the customers to complain to the state, I recommend calling the customers in and offering to swap the vehicle for another one or obtaining a 30day permit from the local tax office (this doesn’t solve the late-transfer problem, but may keep the customer happy). Of course, a second temp tag should never be issued as that would only compound the problem.

Also remember that an expired buyer’s temp tag will possibly result in the customer getting ticketed for driving an unregistered vehicle.

Another problem with late transfer is that the ability to defer sales tax is lost if title isn’t transferred by the 60th calendar day after sale. That is, any unpaid sales tax is accelerated and due and payable as of the 60th day.

One of the most common complaints I hear from dealers who have been cited for late transfer of title is that it was their seller’s (or an auction’s) fault in not supplying the title certificate in time. New car trade-ins, for example, are prime late title prospects because individuals seem to have a hard time keeping track of their title certificates. And most wholesale auto auctions, despite having personnel assigned to work with sellers in tracking down titles, occasionally run into unusual delays and dead ends. If, before the title certificate comes in, the buying dealer spends money fixing up a vehicle, or retails it to a consumer who spends money on it, there will be a problem when the unavailability of a title comes to light.

Dealers should not expect sympathy or a free pass because an

auction, new car dealer, or wholesaler caused the problem by not supplying a title certificate on time.

When this excuse is presented to TxDMV, the response is usually direct and pointed: “If you didn’t have the title certificate, you shouldn’t have made a retail sale of the vehicle.”

I routinely get calls from dealers wanting to know what the state law provides when an auction is late getting a title to a buying dealer.

The answer is that state law is silent on the issue and the contract between the parties controls.

Most auctions have in their registration agreement, or their rules and regulations, provisions dealing with the obligation of sellers to timely provide titles and remedies available to buyers when they don’t. The standard contract

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11

Upcoming Events TIADA Dealer Academy February 2015 12 Keeping Your Dealership

Legal and Compliant Embassy Suites Austin Central 5901 North IH-35, Austin, TX 78723 Online registration available www.txiada.com

March 2015 24 Dealer 101:

Nobody Told Me That!

Best Western Plus 100 Alta Mesa Blvd. East Fort Worth, TX 76134 Online registration available www.txiada.com

April 2015 23 Keeping Your Dealership

Legal and Compliant DoubleTree by Hilton Houston Hobby Airport 8181 Airport Blvd., Houston, TX 77061 Online registration available www.txiada.com

June 2015 16 Keeping Your Dealership

Legal and Compliant Best Western Plus 100 Alta Mesa Blvd. East Fort Worth, TX 76134 Online registration available www.txiada.com

other TIADA events April 2015 20 TIADA Board of

Directors Meeting Austin, TX

August 2015 9 TIADA Board of Directors Meeting San Antonio, TX

9–12 TIADA Annual Conference and Expo J.W. Marriott Hill Country Resort and Spa San Antonio, TX

language provides that a buyer’s sole remedy, if the title doesn’t come in within a specified time (usually 20 to 30 days), is to return the vehicle and void the sale. There is usually language advising buyers that if they sell the vehicle, or perform improvements prior to the title coming in, they do so at their own risk.

Attempts to sue auctions for lost profits or other damages caused by a late title usually fail in light of the clear contract provision.

TIADA was successful a few years ago in getting the legislature to extend the time periods for dealer to transfer and to lengthen the time that a buyer’s temp tag is valid. Those time periods are: Dealer-financed sales: 45 calendar

days from the date of sale.

Non Dealer-financed sales (cash or

third-party financing): 30 calendar days.

Valid period for used of buyer’s

temp tag: 60 days.

Good planning and diligent handling of title transfers can go a long way toward eliminating fines, bad publicity, and disgruntled customers.

Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 35 years. He has written a number of books and hundreds of articles for trade journals and law reviews.

His clientele includes dealers, banks, finance companies, auto auctions and credit unions.

May 2015 7 Dealer 101:

Nobody Told Me That!

Hilton San Antonio Airport 611 Northwest Loop 410 San Antonio, TX Online registration available www.txiada.com

12

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February 2015

America’s Auto Auction

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204 Mars Road Wilmer, TX 75172 972.525.6401, Fax 972.525.6403 General Manager: Henry Valenzuela Wednesday, 9:00 a.m.

www.allianceautoauction.com

6657 US Highway 80 West Abilene, TX 79605 325.698.4391, Fax 325.691.0263 General Manager: Jimmy Compton Friday, 10:00 a.m.

C.M. Company Auctions, Inc. www.cmauctions.com

2258 S. Treadaway Abilene, TX 79602 325.677.3555, Fax 325.677.2209 General Manager: Gregory Chittum Thursday, 10:00 a.m.

austin Adesa Austin

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2108 Ferguson Ln Austin, TX 78754 512.873.4000, Fax 512.873.4022 General Manager: Steve Swanson Tuesday, 9:00 a.m.

America’s AA Austin / San Antonio www.americasautoauction.com

16611 S. IH-35 Buda, TX 78610 512.268.6600, Fax 512.295.6666 General Manager: John Swofford Tuesday, 1:30 p.m. / Thursday, 2:00 p.m.

Insurance Auto Auctions* www.iaai.com

2191 Highway 21 West Dale, TX 78616 512.385.3126, Fax 512.385.1141 General Manager: Geoffrey Rabb Tuesday, 9:00 a.m.

Metro Austin Auto Auction www.metroautoauction.com

8605 Cullen Ln. Austin, TX 78748 512.282.7900, Fax 512.282.8165 General Manager: Brent Rhodes 3rd Saturday, monthly

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4701 Agnes Street Corpus Christi, TX 78405 361.881.9555, Fax 361.887.8880 General Manager: Adriana Serrano Wednesday, 9:00 a.m.

DALLAS / Ft.Worth Metroplex Adesa Dallas

www.adesa.com

3501 Lancaster-Hutchins Rd. Hutchins, TX 75141 972.225.6000, Fax 972.284.4799 General Manager: Brad Garrett Thursday, 9:30 a.m.

Alliance Auto Auction Dallas New! www.allianceautoauction.com

9426 Lakefield Blvd.

Dallas, TX 75220 214.646.3136, Fax 469.828.8225 General Manager: Christopher Dean Wednesday, 1:30 p.m.

America Can! Cars for Kids www.charitycarauctions.org

1911 E. Division Arlington, TX 76011 972.274.5437, Fax 214.944.1950 General Manager: Jennifer Kitchens Saturday, 9:00 a.m.

America’s AA Dallas

www.americasautoauction.com

219 N. Loop 12 Irving, TX 75061 972.445.1044, Fax 972.591.2742 General Manager: Robert Hammonds Tuesday, 1:00 p.m. / Thursday, 1:00 p.m.

Insurance Auto Auctions* New!

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Manheim Dallas

www.manheim.com

5333 W. Kiest Blvd.

Dallas, TX 75236 214.330.1800, Fax 214.339.6347 General Manager: Jeff Modjeski Wednesday, 9:00 a.m.

Manheim Dallas Fort Worth www.manheim.com

12101 Trinity Blvd.

Fort Worth, TX 76040 817.399.4000, Fax 817.399.4251 General Manager: Nicole Graham-Ponce Thursday, 9:30 a.m.

Texas Lone Star Auto Auction www.tlsaa.com

2205 Country Club Drive Carrollton, TX 75006 214.483.3597, Fax 214.483.3814 General Manager: Jeff Dunning Tuesday, 1:00 p.m. / Thursday, 2:00 p.m.

El Paso Manheim El Paso

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485 Coates Drive El Paso, TX 79932 915.833.9333, Fax 915.581.9645 General Manager: Brian Walker Thursday, 10:00 a.m.

Insurance Auto Auctions* www.iaai.com

14651 Gateway Blvd. W El Paso, TX 79927 915.852.2489, Fax 915.852.2235 General Manager: Jorge Resendez Friday, 10:30 a.m.

www.iaai.com

El Paso Independent Auto Auction

4226 East Main Street Grand Prairie, TX 75050 972.522.5000, Fax 972.522.5090 General Manager: Jennifer Wesner Tuesday, 9:00 a.m.

7930 Artcraft Rd El Paso, TX 79932 915.587.6700, Fax 915.587.6700 General Manager: Lori Pidgeon Wednesday, 1:00 p.m.

www.epiaa.com

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February 2015

Insurance Auto Auctions*

san antonio

2535 West. Mt. Houston Houston, TX 77038 281.847.4700, Fax 281.847.4799 General Manager: Michelle Casper Wednesday, 9:00 a.m.

Adesa San Antonio

www.iaai.com

Manheim Houston www.manheim.com

Harlingen / McAllen Big Valley Auto Auction www.bigvalleyaa.com

4315 N. Hutto Road Donna, TX 78537 956.461.9000, Fax 956.461.9005 General Manager: Lisa Franz Thursday, 9:00 a.m.

Insurance Auto Auctions* New! www.iaai.com

900 N. Hutto Road Donna, TX 78537 956.464.8393, Fax 956.464.8510 General Manager: Ydalia Sandoval Tuesday, 9:00 a.m.

houston Adesa Houston www.adesa.com

4526 N. Sam Houston Houston, TX 77086 281.580.1800, Fax 281.580.8030 General Manager: Mark Lindenmuth Wednesday, 9:00 a.m.

America’s AA North Houston www.americasautoauction.com

1440 FM 3083 Conroe, TX 77301 936.441.2882, Fax 936.788.2842 General Manager: Buddy Cheney Monday, 6:30 p.m.

Houston Auto Auction

www.houstonautoauction.com

6767 North Freeway Houston, TX 77076 713.644.5566, Fax 713.644.0889 General Manager: Joe Lavigne Tuesday, 1:00 p.m.

14450 West Road Houston, TX 77041 281.924.5833, Fax 281.890.7953 General Manager: Eddie Pope Tuesday, 9:00 a.m. / Thursday 6:30 p.m.

Manheim Texas Hobby www.manheim.com

8215 Kopman Road Houston, TX 77061 713.649.8233, Fax 713.640.6330 General Manager: Rich Curtis Thursday, 9:00 a.m.

longview Alliance Auto Auction Longview www.allianceautoauction.com

6000 East Loop 281 Longview, TX 75602 903.212.2955, Fax 903.212.2556 General Manager: Jeff Loftin Friday, 10:00 a.m.

Insurance Auto Auctions* www.iaai.com

5577 Highway 80 East Longview, TX 75605 903.553.9248, Fax 903.553.0210 General Manager: Robert Dunning Thursday, 9:00 a.m.

lubbock Insurance Auto Auctions* www.iaai.com

5311 N. CR 2000 Lubbock, TX 79415 806.747.5458, Fax 806.747.5472 General Manager: Lori Davee Tuesday, 9:30 a.m.

midland / odessa

Insurance Auto Auctions*

Insurance Auto Auctions*

16602 East Hardy Rd. Houston, TX 77032 281.443.1300, Fax 281.443.4433 General Manager: Louis Cappi Thursday, 9:00 a.m.

701 W. 81st Street Odessa, TX 79764 432.550.7277, Fax 432.366.8725 General Manager: Barbara Hallmark Thursday, 11:00 a.m.

www.iaai.com

February 2015

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www.iaai.com

www.adesa.com

200 S. Callaghan Rd San Antonio, TX 78227 210.434.4999, Fax 210.431.0645 General Manager: Sam D’Amato Thursday, 10:00 a.m.

Insurance Auto Auctions* www.iaai.com

11275 S. Zarzamora San Antonio, TX 78224 210.628.6770, Fax 210.628.6778 General Manager: Brian Sell Monday, 9:00 a.m.

Manheim San Antonio www.manheim.com

2042 Ackerman Road San Antonio, TX 78219 210.661.4200, Fax 210.662.3113 General Manager: Mike Browning Wednesday, 9:00 a.m.

waco Alliance Auto Auction Waco www.allianceautoauction.com

15735 I-35 Frontage Road Elm Mott, TX 76640 254.829.0123, Fax 254.829.1298 General Manager: Darren Darnell Friday, 10:00 a.m.

Heart of Texas Auto Auction www.heartoftexasautoauction.com

2508 Old Marlin Hwy. 6 Waco, TX 76705 254.755.7713, Fax 254.755.7746 General Manager: Allan Wichkoski Thursday, 7:00 p.m.

Oklahoma city, OK Dealer’s Auto Auction of OKC, Inc. www.daaokc.com

1028 South Portland Oklahoma City, OK 73108 405.947.2886, Fax 405.943.8370 General Manager: Gary Smith Thursday, 8:30 a.m.

15

e-Tag Supplies —

In Stock for Immediate Shipment!

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ETAIL

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SALES

REDITOR SELLER/C : ADDRESS ZIP: CITY, ST,

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Attac · Burrel Addendum ight 2009 Insurance 09 · © Copyr · 9/1/20

316 bpc #24-4

Please Welcome Our Newest TIADA Members Autostoke Ekaterina Fry 9422 Mills Rd Houston, TX 77070

DriveTime – McAllen Victor Del Bosque 2601 W Expressway 82 McAllen, TX 78503

Black Star Motors, LLC Leondre Patton 4000 Parkside Center Blvd, #2004 Farmers Branch, TX 75244

DriveTime – SW Freeway Rashad Pride 6335 Southwest Freeway Houston, TX 77074

Chase Auto Finance- branch Iraj Afghani 2518 Berry Rd Houston, TX 77093

DriveTime – Tyler Jarrod Ray 3227 SSW Loop 323 Tyler, TX 75701

JJ Kane Auctioneers Jeff Minix 1000 Lenola Rd., Building One Suite 203 Maple Shade, NJ 8052

Performance Motor Company, LLC Parker Leary 870 US Hwy 259 South Daingerfield, TX 75638

L&L Autolink Mike Wherley 1201 E Plano Parkway Plano, TX 75074

Public Auto Brokers Paul Bosco 1425 Justin Rd. #950 Lewisville, TX 75077

Miracle Mile Motors Michael McClure PO Box 221 Eastland, TX 76448

Rossi Automotive Willie Watt 7990 Mansfield Cardinal Rd Arlington, TX 76060

DayPro Auto, Truck & Cycle, LLC James Day 37535 Interstate 10W, Unit A Boerne, TX 78006

Expert Motors Antonio Isturiz PO Box 55763 Houston, TX 77255

Doctor Windshield Yusuf Henry 7070 Southwest Freeway Houston, TX 77074

Houston Auto Sales Inc Marc Khoury 5801 Schumacher Ln Houston, TX 77057

My Car Store Jason Ripple 3812 NE 28th Street Haltom City, TX 76111

DriveTime – Corpus Christi Antonio Pena 7336 S Padre Island Dr Corpus Christi, TX 78412

JD Byrider- Longview Mark Bedgood 3908 SSW Loop 323 Tyler, TX 75701

PAACO- Temple David Sanchez 1208 S. First Street Temple, TX 76504

DriveTime – Katy Freeway Tim Long 16009 Katy Freeway Houston, TX 77094

JD Byrider- Waco Mark Bedgood 3908 SSW Loop 323 Tyler, TX 75701

Paisanos Auto Sales Miguel Romero 2212 Wirt Rd Houston, TX 77055

Motorvation Earl Williams 278 S Howard St Atlanta, GA 30317

Texas Auto Solutions #2 Scott Townsend PO Box 2351 Cypress, TX 77410 Vega Motors Juan Vega 303 Moursund Blvd.

San Antonio, TX 78221 Villarrreal Motors Inc. Ana Gilley 1100 S Staples Corpus Christi, TX 78404

SPECIALIZING IN THE INSURANCE NEEDS OF THE TEXAS USED CAR DEALER FOR OVER 25 YEARS

(800) 727-7124 • Garage Liability • Dealers Open Lot • Wreckers & Haulers

• Dealer Bonds • Garagekeepers • Workers Compensation

Contact Mike Pool, John Mahaffey or Bret Jones for a competitive quote. m.pool@teiinsurance.com • j.mahaffey@teiinsurance.com • bret@teiinsurance.com P.O. Box 850746 • Mesquite, TX 75185 • (972) 288-3266 • Fax (972) 288-2608 www.teiinsurance.com February 2015

T e x a s

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17

feature Market Survey of Car Buyers

by Somir Paul

President, Woodlands Financial Services

T

he following data comes from the Market Survey of Car Buyers conducted annually by Woodlands Financial Services, Inc. This survey of 337 car buyers was conducted from November 3, 2014 to December 2, 2014.

The sample size for the 2013 survey was 352 customers.

The sample was randomly selected from contracts that were purchased from Texas dealerships from January 2010 to

October 2014. Customers were interviewed in person at the Woodlands Financial Services payment center or by telephone.

Customers were generally located within a 150 mile radius of Houston. The average contract term was 36 months; the average amount financed was $10,000; the average monthly payment was $400; and the mileage on the vehicles ranged from 80,000 to 200,000.

What brought you to the dealer?

#1 reason to buy?

When do you plan to buy your next vehicle?

Would you buy new or used?

February 2015

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What kind of vehicle?

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What amount of monthly payment can you make on the next vehicle?

Do you own or rent your home?

Did you research online before shopping for your last vehicle?

www.bigvalleyaa.com

Big V alley Auto Auction Donna, Texas

SALE THURSDAYS AT 10am 4 Lanes - Over 500 Vehicles Weekly Air Conditioned Bays OVE - Auto IMS - Auction Pipeline Simulcast - Online Registration

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4315 N Hutto Rd. Donna, Tx. 20

956.461.9000 T e x a s

D e a l e r

February 2015

Do you plan to buy from the same dealer as your last purchase?

Why would you buy from the last dealer you visited/purchased?

Important Findings from the Survey riving by, referrals and repeat customers accounted D for 87% of the total buyers at the store, compared to 86% last year.

Critical factors that influenced the buying decision in order of importance are: Inventory Selection, Pricing, Customer Service and Financing. This year’s results are exactly the same as last year.

This year’s sample shows that 31% shopped on the internet compared to 35% last year.

February 2015

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ifty-five percent of the customers plan to purchase F a vehicle in the next two years. This number has not changed from our 2013 survey.

Customers who would go back to the same dealer to buy their next car is at 40% compared to 41% last year.

The most important reasons for a customer to ‘avoid a dealer’, in order of importance are: lack of customer service, not enough selection, want a new vehicle and the price was higher than competitors.

21

One Second Locate (no spinning) Reduce Repossessions Impound Notifications

Address Verification Scheduled Reports Stops Report

news & notes

Happenings in the Industry…

compliled by TIADA Staff

NIADA Foundation Scholarship

T

he NIADA Foundation sponsors four students annually who have displayed outstanding abilities in education. These students will each receive a $3,500 scholarship to the college or university of their choice. The awards are presented each June at the National Independent Automobile Dealers Association Convention. Eligible students must: 1. B e classified as a high school senior during the current 2014-2015 school year and legally reside in one of the four NIADA Regions. (Texas students qualify as part of Region III.) 2. Have maintained an outstanding academic achievement record as reflected by an official high school transcript; and 3. D emonstrate an aptitude for college work as measured by SAT or ACT scores.

Applications for the scholarship must be postmarked no later than March 16, 2015. For details and an application form, visit http://www.niada.com/ foundation_scholarship.php.

Applications for Motor Vehicles Sales Finance License Accepted Online ONLY

The Office of Consumer Credit Commissioner (OCCC) recently announced that all applications for a new Motor Vehicle Sales Finance license must now be submitted through the online system “ALECS” (Application, Licensing, Examination, Compliance System), which can be found at https://alecs.occc.texas.gov. Any paper application postmarked February 1, 2015 or later will be returned to the applicant.

Instructions for creating an account and for submitting an application in the ALECS system are available at www.occc.state.tx.us.

February 2015

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TIADA Quality Dealer Nominations

Every year TIADA awards a Texas independent auto dealer the distinction of “Quality Dealer of the Year.”

Nominees for this award demonstrate exceptional business ethics, service to TIADA, good citizenship and service to the community. The TIADA winner will be eligible for the National Quality Dealer Award, which is presented at the NIADA Convention.

Nominations for this award are now being accepted online. Visit www.txiada.com and click on the Awards link found under the “About TIADA” tab for more information and to submit your nomination.

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23

feature Excerpts from The CARLAWYER

©

by Thomas B. Hudson and Nicole Frush Munro

Federal Developments

O

n December 12, the Federal Trade Commission announced that it filed complaints against two auto dealerships seeking civil penalties for violations of 2012 FTC administrative orders that prohibited the dealerships from deceptively advertising the costs of financing or leasing a car. The first complaint, filed against Billion Auto, a chain of dealerships operated in Iowa, Montana, and South Dakota, and against Nichols Media, Inc., an advertising company, alleged that Billion Auto and Nichols Media violated the FTC administrative order by hiding material terms in fine print, using distracting visuals, and using “rapid-fire” audio delivery in their ads. Billion Auto and Nichols Media have agreed to pay $360,000 in civil penalties to settle the FTC’s

24

On November 19, the CFPB took its first action against a “buyhere, pay-here” car dealer. charges. In a separate action, the FTC charged Ramey Motors, Inc. and three affiliated dealerships operating in Virginia and West Virginia with violating a similar FTC administrative order. Ramey Motors’ ads allegedly misrepresented the costs of financing or leasing a vehicle by concealing important terms of the offer, such as a requirement to make a substantial down payment.

The FTC also alleged that Ramey Motors failed to make credit disclosures clearly and conspicuously as required by the Truth in Lending Act. Ramey Motors and its affiliates are subject to $16,000 in civil penalties for each alleged violation of the FTC administrative order.

On December 23, the FTC announced that it reached a proposed consent order with a Texas dealership, TXVT Limited Partnership d/b/a Trophy Nissan, that allegedly used false or deceptive ads to sell or lease vehicles, in violation of the FTC Act, the Consumer Leasing Act and Regulation M, and the Truth in Lending Act and Regulation Z. Among other charges, the FTC alleged that the dealership advertised prices, lease or finance terms, and promotions and then attempted to disclaim its offers using small text in the print and television ads. The FTC also alleged that one of the dealership’s ads deceptively claimed that consumers could pay only $1 in order to get out of their current financing or lease obligation. Instead, according to the allegations, the dealership would add the balance of the financing or lease obligation to the balance of the new financing contract or lease. In another promotion, the dealership claimed that it would match consumers’ tax refunds to use for a down payment, but the small print disclosed that it would match refunds of no more than $1,000. Under the proposed consent order, the dealership is prohibited from misrepresenting that it will pay off a consumer’s trade-in, misrepresenting material terms of any T e x a s

D e a l e r

February 2015

promotion or other incentive, misrepresenting the cost of leasing or buying a vehicle, and failing to clearly and conspicuously disclose material terms of a promotion or other incentive.

No More Allotments

On November 21, in an effort to curb allotment system abuses, the Department of Defense announced a policy change that will prohibit servicemembers from using new allotments to buy, lease, or rent personal property, effective January 1, 2015.

The allotment system allows servicemembers to make discretionary allotments from their pay and set up automatic payments to creditors for a variety of purposes. Under the new policy, personal property includes vehicles, appliances or household goods, electronics, or other tangible and movable consumer items. The policy change will not affect existing allotments and does not prohibit allotments to savings accounts or investments, to support dependents, or to pay insurance premiums, mortgages, or rents. The change applies only to active duty servicemembers, not military retirees or DoD civilians.

BHPH Servicing Woes

On November 19, the CFPB took its first action against a “buy-here, pay-here” car dealer. The CFPB claims that DriveTime employees harassed borrowers at work, harassed borrowers’ references, made excessive and repeated calls to wrong numbers, provided inaccurate repossession information to credit reporting agencies, failed to properly handle consumer complaints about alleged inaccurate information DriveTime furnished to credit reporting agencies, and failed to implement reasonable procedures to ensure the accuracy of consumers’ credit information.

DriveTime must pay $8 million as a civil money penalty, end its allegedly unfair debt collection tactics, fix its credit reporting practices, and arrange for harmed consumers to obtain free credit reports.

February 2015

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Litigation

Arbitration Denied where Merger Clause in RISC without Arbitration Superseded Purchase Agreement with Arbitration

Car buyers signed a retail purchase agreement containing an arbitration clause. They also signed a retail installment sale contract that did not contain an arbitration clause, but included a merger clause stating that the RISC contained the entire agreement. The buyers sued the dealership for violating Florida’s Deceptive and Unfair Trade Practices Act in connection with electronic titling/registration filing fees charged to its customers. The dealership moved to compel arbitration, and the trial court denied the motion, concluding that the RISC, with no arbitration clause, superseded the retail purchase agreement.

The Court of Appeal of Florida affirmed, agreeing with the trial court that no agreement to arbitrate existed because the merger clause in the RISC rendered the retail purchase agreement’s arbitration clause nugatory. See HHH Motors, LLP v. Holt, 2014 Fla. App. LEXIS 19710 (Fla. App. December 3, 2014).

Service Contract Properly Included in Amount Financed Where Service Contract Purchase Not Required for Financing

When a buyer bought a car from a dealership, she also bought GAP protection and a service contract.

The buyer claimed that she did not want to buy the service contract but that she was told that its purchase was required in order to obtain financing. The buyer sued the dealership for violations of the Truth in Lending Act, alleging that the service contract charge should have been included in the finance charge, rather than in the amount financed disclosure, because it was payable incident to (cont’d on pg. 38) 25

1

c r o s s w o r d

Answers to

C r o s s w o r d #1 (Texas Dealer, January, 2015)

Come for the cars, stay for the

FEBRUARY 11

4th Anniversary Sale

MARCH 18

Sunland Park Derby Days

Go to epiaa.com to view our 2015 promotional sale schedule EPI EL PASO 7930 Artcraft Road - El Paso, TX 79932 P: 915.587.6700 - www.epiaa.com

26

Experience one of our core values: T e x a s

D e a l e r

February 2015

Ignorance is no defense.

Know the law.

Repo and financing issues are among the most common violations found by the OCCC. If you own a previous edition of these books from 2008 or earlier, it is recommended that you upgrade to the current editions.

Dealer Financing of Used Car Sales This comprehensive book covers all aspects of the complicated world of seller-financing in Texas, including Maximum Finance Rates; Retail Installment Contracts; Contract Amendments; VIT; Repair Charges; Federal Disclosures and more.

TIADA Member Price: $125 (non-members $175)

Texas Automobile Repossession: A Lien Holder’s Legal Guide Everything you need to know about repossessions is addressed in this book, including Notification Requirements, Post-Repo Procedures, Private Sale vs. Strict Foreclosure, Bankruptcy, Post-Disposition Accounting, Tracking and Shut-off Devices, the 60% Rule and more. PLUS – includes all required forms.

TIADA Member Price: $125 (non-members $175) Now available for purchase online at www.txiada.com under “Legal Resources” or call 800.442.5944 to order by phone.

When ordering online, login with your TIADA username and password to receive the discounted rate. All prices include shipping. Orders are shipped in 3-5 business days.

Attorney Michael W. Dunagan is the author of the two must-have books for every Buy-Here, Pay-Here dealer in Texas. Mr. Dunagan has been General Counsel to TIADA for over 35 years.

His law firm specializes in the representation of independent Texas car dealers.

February 2015

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feature Making a Floor Plan Work for You

by Karen Millwood

Account Executive for NextGear Capital, Inc.

T

he ever-changing auto remarketing industry has seen more changes in recent years than ever before. Today, more than ever, having a floor plan partner is very important to the small business owners’ vitality. If you are looking to grow an existing business or beginning the journey of business ownership, it is important to have a good inventory finance partner to assist in expanding or getting your new business off the ground. A floor plan can ensure you have fluid cash flow, a variety of inventory to increase your consumer base and can make buying inventory a simpler process.

Why a Floor Plan Company?

There are several things you should know and take into consideration when choosing a business partner in inventory finance. An inventory finance plan, known as a “floor plan,” can increase your cash flow.

A floor plan gives you the option and the freedom to use your money where it is needed most, instead of being tied up in inventory on your lot. It provides the flexibility to purchase a variety of inventory that can drive more consumers to your lot.

Know Your Numbers

When researching which floor plan partner is right for you, it is very important to know your numbers.

A good floor plan company will ask you in detail about your business model before quoting you term plan fees. Every business model is different, catering to various demographics: specific locations, types of consumer (cash vs. financing), etc. Other factors, such as average price, turn time, retail, wholesale, specialty units, power sports units, etc. may be considered in the equation as well.

Know Your Business Model When the time comes to have this conversation with a prospective floor plan partner, it is important to know your business model and be well-versed in presenting it. What is your average inventory turn time? What are your operating expenses? How many cars must you sell per month to pay your operating expenses (your break even number)? What

28

If you are looking to grow an existing business or beginning the journey of business ownership, it is important to have a good inventory finance partner to assist in expanding or getting your new business off the ground. is your average profit margin per car? These are all key questions a good business person should know.

Knowing these numbers and reviewing them on a consistent basis is significant in establishing where you were, where you should be, where you are going, and how long it’s going to take to get you where you need to be.

Keep in mind that floor plan companies are discretionary lenders. The less risk you appear to be, the more likely you are to get that great term plan fee structure and the amount of money your business needs. Be proud to share your numbers with your floor plan company. Let them check inventory and see your financials when asked. They aren’t just trying to be nosy. Their review can factor in to determining your fee structure and the line of credit you qualify for. Also, you should know your credit score and any hiccups on your credit, as this could negatively affect the term plan you qualify for. It doesn’t necessarily mean you would not qualify for a floor plan line of credit. However, it could affect how much you pay for one initially.

T e x a s

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February 2015

Know Your Needs

Last but not least, once approved, don’t use the entire line of credit all at once. It is important to maintain discipline and floor plan responsibly.

Space your purchases out over a period of time.

Loading up a quarter of a million dollars’ worth of inventory in a single week could be a huge mistake. The payoff on that inventory will come due at the same time and if they haven’t sold, you will be paying a considerable amount of money all at once. This is important to keep in mind as you are flooring inventory.

You work hard, so make your money work for you! Focus on developing and perfecting your operation and take care in choosing the business partners and tools you work with. A floor plan may provide the buying power you need to sustain a thriving business model.

alentines ay

D

Karen Millwood is an Account Executive for NextGear Capital Inc. and can be reached by email at karen.millwood@nextgearcapital.com and by phone at (704) 308-1727.

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February 2015

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Commercial Fire • Contents • Wrecker • 2-Car Haulers Cargo • Dealer Bonds • Retirement • Life Insurance Homeowner Insurance • Personal Lines 29

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T

legislative bulletin

he gavel in both Texas chambers hammered in the beginning of the 84th Texas Legislative Session last month ushering in 25 new faces on the house side and a handful of new Senators. All told, that is about a 40% turnover in two years. Even more dramatic are the not-so-new faces taking the reins at every one of the top political positions in Texas, including Governor, Lieutenant Governor, Attorney General and Comptroller.

As the fresh new faces and longtime legislators begin settling in to their new roles of leading the state, the first order of business for both chambers is to appoint committee members and reward House members and Senators with chairmanships. (The House must elect a Speaker first, but the tealeaves at press time favor Representative Joe Straus retaining that post.) With so

Better Business Through Superior Customer Service!

SALE SCHEDULE

by Jeff

Martin

many new faces it will take a while for the leadership to sort through committee appointments; however, once all of the committee members have been appointed, you will be able to see the complete list by going to www.txiada.com and clicking on “Legislative Action Center” under the Advocacy tab.

As you know, TIADA will review each bill filed and try to identify those that might have unintended consequences and could negatively affect our industry as well as support legislative changes that improve and enhance the independent automobile industry. Our goal is always to work with the author of any bill and other stakeholders and offer substitute language when appropriate. A few bills we are currently working on include:

HB 335 (Thompson, Ed) and HB 318 (Keough) – Both these bills propose the elimina-

tion of named-driver-only policies. TIADA supports this bill.

HB 385 (Keough) – This bill would allow an individual to sell up to 11 vehicles per year without obtaining a dealer’s license. Currently an unlicensed individual may sell only four per year. We believe anyone selling more than four vehicles in a year is essentially dealing in motor vehicle sales and should be licensed appropriately. TIADA opposes this bill.

While we haven’t seen a bill filed on the issue yet, there has been a lot of talk about a group aiming to change the law so that a mechanic’s lien would be transferable or expanded in various ways that would make it easier for an individual to secure such a lien. For those of you in the finance business, you know the mechanic’s lien has priority over the original lienholder. A similar bill was filed last year; we opposed the bill and it died in committee.

Those of you who have followed this process in the past know that the print version of Legislative Bulletin tends to become outdated before the ink is even dry on the page. Please be aware that your best source for up-to-the-minute information is the Legislative Action Center found in the Advocacy section of www.txiada.com. As always, we welcome the input of our members regarding legislative matters. TIADA’s legislative team will work diligently to keep you abreast of the issues and call on you to act when needed.

32

T e x a s

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February 2015

DEALER CAPITAL WITHOUT THE HASSLE. Why SDS?

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SUNDAY APRIL 12TH VENDOR SPOTLIGHTS

1:00 PM - 4:00 PM

These sessions provide a unique opportunity to learn more about some of the best products and services in the industry. Our presenters are hand-picked and there are multiple sessions available. From compliance to software to Twenty Groups these sessions allow you to gather information and ask questions about top rated products and services.

FIRST TIME ATTENDEE MEET AND GREET

5:00 PM - 5:30 PM

WELCOME RECEPTION

5:30 PM - 8:00 PM

MONDAY APRIL 13TH BREAKFAST GENERAL SESSION

7:30 AM - 9:00 AM 9:00 AM - 12:00 PM

Chris Leedom, President, Leedom Group Our Convention Chairman and Founder will offer our key note address. Mr. Leedom is recognized as one of the foremost authorities in the BHPH business. Chris is both an industry expert and a dealerowner so he has a unique perspective on the marketplace. He will share with our convention attendees how the market is changing, the impact of third party lenders, and how to compete for the long haul.

Since 1995 his comments have served as a bellweather of what is to come.

Jim Jackson, CEO—Oak Motors, Indiana We have invited Jim Jackson to speak to our general session attendees. Jim has served as the CEO of Oak Motors, a large BHPH operation based in the Indianapolis market. Jim is unique in that he has served as a coach to many dealers in the industry and now is a sitting CEO. He will offer his thoughts and observations on what it takes to operate in the BHPH business at the highest levels. What drives peak performance? How do you motivate your team and custoemrs toward success?

LUNCH

12:00 PM - 1:00 PM

Lunch is held in our Grand Expo hall where you will have access to over 80 vendors and sponsors.

These companies represent the best products and services in the business. This is another opportunity to work the Grand Expo Hall.

WORKSHOPS

1:00 PM - 4:50 PM

We will have over 20 workshops featuring leading experts, trainers and others with deep knowledge of the industry. From benchmarks to legal issues, to collections and business development concepts these sessions provide a plethora of opportunities to take back ideas and strategies to put to work in your business.

RECEPTION

5:00 PM - 6:30 PM

BHPH - THE BIG EASY

6:30 PM - 9:00 PM

Once again we will host a special celebration of all things BHPH. This is a chance to unwind after a long day of learning and networking with other dealers and industry insiders. This event is most definitely the best party on the planet for this industry. Come join us in the Big Easy for the Big Party!

CALL NOW 1-866-684-3420 OR VISIT BHPHWORLD.COM

TUESDAY APRIL 14TH BREAKFAST

8:00 AM - 9:00 AM

GENERAL SESSION

9:00 AM - 10:00 AM

We will feature an invited motivational/business speaker to address our attendees. Each year this is one of the most exciting sessions that offers fresh perspectives and information you can use in your business.

MIMOSA/BLOODY MARY BREAK

10:00 AM - 10:45 AM

EXPERT PANEL

11:00 AM - 12:00 PM

We will invite some of the leading experts from various disciplines within the industry to offer their thoughts on the current marketplace and to answer all of your questions. This is a live interactive session with commentary and questions flowing from the audience so come join the conversation.

SUNDAY APRIL 12

TH

MONDAY APRIL 13

TH

TUESDAY APRIL 14TH

BREAKFAST

BREAKFAST

GENERAL SESSION

GENERAL SESSION

5:00 PM - 5:30 PM

LUNCH

WELCOME RECEPTION

WORKSHOPS

MIMOSA/ BLOODY MARY BREAK

VENDOR SPOTLIGHTS

1:00 PM - 4:00 PM

FIRST TIME ATTENDEE MEET & GREET

5:30 PM - 8:00 PM

7:30 AM - 9:00 AM

9:00 AM - 12:00 PM 12:00 PM - 1:00 PM 1:00 PM - 4:50 PM

RECEPTION

5:00 PM - 6:30 PM

8:00 AM - 9:00 AM

9:00 AM - 10:00 AM

10:00 AM - 10:45 AM

EXPERT PANEL

11:00 AM - 12:00 PM

BHPH THE BIG EASY

6:30 PM - 9:00 PM

CALL NOW 1-866-684-3420 OR VISIT BHPHWORLD.COM

Excerpts from The CARLAWYER© (cont’d from pg. 25)

CIPG Insurance Issued by

Vehicular Service Insurance Company, RRG* Insured/Reinsured

Limited Warranty Program (LW) ceded for Thirteen Dollars

($13) Per LW

Insured/Reinsured

Vehicle Service Contract Program (VSC)

ceded for Sixty Nine Dollars

($69) Per VSC

BHPH/LHPH “Pay-As-You-Go” Programs Available Please call 1-844-542-6217 and leave a message with your call back number or Please Visit

www.theCIPG.net

*Texas Department of Insurance License # 13764570

38

the extension of credit. The U.S. District Court for the District of Minnesota granted summary judgment for the dealership. The court found that even if the dealership stated that the service contract was a condition of financing, the documents the buyer signed in connection with the truck purchase stated otherwise. The service contract itself stated that purchase of the service contract was not required in order to buy or finance the vehicle. The Product Price and Payment Disclosure for Installment Sales also stated that finance terms and approval were not conditioned on the purchase of the service contract. See Salvate v. Automotive Restyling Concepts, Inc., 2014 U.S. Dist. LEXIS 168693 (D. Minn. December 5, 2014).

Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the law firm of Hudson Cook, LLP. Tom has written several books, available at www.counselorlibrary.com. Tom is also the publisher of Spot Delivery,® a monthly legal newsletter for auto dealers, and the Editor in Chief of CARLAW,® a monthly report of legal developments for the auto finance and leasing industry. Nikki is a contributing author to the F&I Legal Desk Book and frequently writes for Spot Delivery. Spot Delivery, CARLAW, and the books are produced by CounselorLibrary.com LLC. For information, visit www.counselorlibrary.com. Copyright CounselorLibrary.com 2014, all rights reserved. Single publication rights only, to the Association.

(1/15), HC# 4840-1005-4945.

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February 2015

resource guide The TIADA Website:

www.txiada.com Members can log in with their username/password and access our Dealer Member Directory, Legislative Action Center, Legal Consultation Service and much more. Register for all upcoming TIADA events online at the Calendar of Events; access our online membership application; find contact information for all our Local Chapters, and find many additional resources at our Links page.

Texas Department of Motor Vehicles 888.368.4689 www.txdmv.gov Office of Consumer Credit Commissioner 800.538.1579 www.occc.state.tx.us

Texas Comptroller 800.252.1382 www.window.state.tx.us NIADA 800.682.3837 www.niada.com

Repossessions

American Recovery Association 972.755.4755 www.repo.org or contact TIADA state office

Forms

Burrell Printing 800.252.9154 www.burrellprinting.com

lubbock

Auction Listings

Lone Star Auto Auction www.lsaalubbock.com

2706 Slaton Hwy Lubbock, TX 79404 806.745.6606 , Toll-Free 888.299.6606 General Manager: Dale Martin Wednesday, 10:00 a.m.

lufkin Lufkin Dealers Auto Auction

2109 N. John Reddit Drive Lufkin, TX 75904 936.632.4299 General Manager: Wayne Cook Thursday, 6:00 p.m.

tyler Greater Tyler Auto Auction

11654 State Higway 64 W Tyler, TX 75704 903.597.2800 General Manager: Wayne Cook Tuesday, 5:00 p.m. – Repo Lane Tuesday, 6:00 p.m. – Consignment

February 2015

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Local Chapters Victoria Dennis Schroller Victoria Autos Direct 361.578.0530 Dennis@victoriaautosdirect.com Meeting – 1st Monday (Monthly) Fort Worth Jerry Smith HJ Smith Automobiles 817.282.0102 hjsmithauto@yahoo.com Meeting- 4th Thursday of December, February, April, June, August and October Dallas County Kevin Mims VP Auto Sales 972.864.1300 kevinm@vpautosales.com Meetings as needed/TBD Houston Michael Zak Dixon Motors 281.931.1300 houstoniada@gmail.com Meeting – 2nd Monday (Monthly) Waco-Heart of Texas Bill Miller Bill Miller Used Cars Meeting – 2nd Monday (Monthly) For more information contact Eddie Massey, Massey Motors 254.753.6661 San Antonio Robert Beck Stop N’ Drive Motors 210.432.1101 stopdrive@texas.net Meetings quarterly (dates announced at www.txiada.com) El Paso Ricardo Gardea Cars Plus 915.778.8285 cars_plus@att.net Meeting – 3rd Friday (Monthly) 39

ATTENTION STUDENTS!!!

$1,000 TIADA

Texas I n d epen d ent A utomob i l e D ea l ers A ssociation

SCHOLARSHIP

SCHOLARSHIP APPLICATION

DEADLINE

May 1, 2015 {Applications and/or any required documents received after May 1, 2015 will NOT be accepted.} Criteria and Guidelines 1. Each applicant must be entering or currently enrolled in an accredited college or a trade school. Proof of enrollment must be included with this application.

Name:

DOB:

Address: City:

State:

Zip:

State:

Zip:

Telephone Number: High School Last Attended: Address:

2. Each applicant must provide a letter from their TIADA member sponsor that includes the sponsor’s address and Saturday phone number.

City:

3. Each applicant must complete the application form.

Other High Schools Attended (Names and Addresses):

4. Applicant must be in the top 25% of class.

If applicant is currently enrolled, provide college transcripts with official university imprint. In addition, a copy of high school transcripts is required for applicants who are college freshmen.

5. Provide a detailed description of participation in any academic, honorary, civic or extracurricular activities in college. In addition, a detailed description of high school activities is required from college freshmen along with a college acceptance letter.

6. Compose an essay of no more than two typed, double-spaced 8 ½” x 11” pages. The essay should discuss the applicant’s relationship with their TIADA scholarship sponsor, current education goals and future aspirations as it relates to the applicant’s subject/training area.

7. Provide at least two (but no more than three) letters of recommendation, no older than one year, from college/high school faculty, employers or other appropriate sources (not related).

40

Date:

Dates of Attendance: Date of Graduation:

College(s) you are attending or plan to attend for admission:

Parents Name(s): TIADA Member Name (Sponsor): TIADA Member Company Name: TIADA Member Address: City:

State:

Zip:

Sponsor Signature Should you have any questions, please contact TIADA at 800.442.5944. Please return the completed application with all required documents to: TIADA Attention: Scholarship Applications 9951 Anderson Mill Rd., Suite 101 / Austin, TX / 78750

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February 2015

regulation matters A Few Quick Hitters

by Danny

Y

ou know, not every worthy column topic can generate the necessary 600-700 words required by my merciless editor to fill this space. So, must those ideas be relegated to the eternal dustbin of unexpressed thoughts, doomed to permanent obscurity? I say no. Just stack a few of these babies up and Presto! A full length column…

Replacing Odometers

Odometer issues are certainly worthy of an entire article; in fact, TIADA attorney Mike Dunagan held forth on this subject extensively in his September 2010 article, “Odometer Problems Don’t Go Away With ‘Exempt’ Status.” However, I wanted to focus on a relatively small but important point: If you have an odometer (or entire instrument cluster) replaced, you are subject to the following federal odometer law: 49 U.S.C. § 32704 : US Code — Section 32704: Service, repair, and replacement (a) Adjusting Mileage. — A person may service, repair, or replace an odometer of a motor vehicle if the mileage registered by the odometer remains the same as before the service, repair, or replacement. If the mileage cannot remain the same — (1) the person shall adjust the odometer to read zero; and (2) the owner of the vehicle or agent of the owner shall attach a written notice to the left door frame of the vehicle specifying the mileage before the service, repair, or replacement and the date of the service, repair, or replacement. (b) Removing or Altering Notice. — A person may not, with intent to defraud, remove or alter a notice attached to a motor vehicle as required by this section.

So if this applies to you, get that sticker on the door frame and disclose, disclose, disclose. Violators are subject to serious regulatory enforcement penalties as well as potential private cause of action lawsuits.

Repo Mess

This one is ripped straight from the pages of today’s headlines — or at least the pages of last month’s Texas Dealer. In the January issue we featured a guest

42

Langfield

TIADA deputy director

article from Les McCook of the American Recovery Association warning of a repo scam. About a week later I got a call from a member with a familiar story, but with a twist. Seems this member received a call from a random individual, asking if the dealer had a particular vehicle out for repo. She did. The individual offered to pick up the vehicle and drop it at her store for $300 if she would authorize him to do so. So she did. But the car never turned up, so she called this individual and learned that the tab was now $875 and that she would need to come pick it up from him. In the meantime, our member’s customer showed up with the $1000 or so she needed to get current on her contract, looking to get her vehicle back. At this writing the “repo guy” was refusing to take calls from the dealer or divulge the location of the vehicle. No telling how this one will end…

So please, use care when choosing a recovery agent and be aware that you are responsible for the actions of that agent.

Adverse Action — to Provide, or Not to Provide

As most dealers know, if a customer makes an application for credit, an adverse action notice generally must be provided if the prospective creditor refuses to grant credit in substantially the same amount or on substantially the terms requested in an application.

We had a member contact us to ask, “Do we have to send an adverse action notice to the customers that do not request specific credit terms and don’t take delivery?”

I turned to NIADA legislative & regulatory counsel Shaun Petersen for his thoughts. “If no general terms are offered originally and the customer is making the decision to not accept what he qualifies for, then the dealer has not taken an adverse action,” Shaun told me. “It is the customer who is making the decision not to accept credit offered. That would not trigger an adverse action notice.”

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February 2015

a special

Thank You

$2,500+ Tommy Gregory

$1,000–$2,499 Patricia Harless

$500–$999 Keith Hagler

to our 2014 INDEPAC Contributors

$250–$499 Kathrine Tolsch • Wayne Meagher Up to $249 Carleton Heller • Byron Riley

Make your 2015 contribution today and support your association!

INDEPAC contributions may be sent to INDEPAC c/o TIADA, 9951 Anderson Mill Rd., Austin, TX 78750 (Personal contributions only – corporate funds cannot be accepted)

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February 2015

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S I N C E 1972.

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TIADA DeAler AcADemy 2015

Dealer 101: Nobody Told Me That!

This class is designed for those dealers new to the business, those considering opening their own dealership, new employees, family members or anyone else needing a refresher on the basics. We’ll cover everything you need to know to run a clean, compliant used car dealership in Texas. Topics include: n n n n n n

n

8:30am - 5:30pm $149 Per Registrant

n n

n

Transferring Titles Customer ID Requirements Odometer Disclosures Title & Registration Fees Acquiring Inventory Temp Tags & Metal Dealer Plates Requirements for Maintaining Dealer License The Buyer’s Guide - As Is Inspections, Emissions, Green Slip Power of Attorney

n n n

n n n n n n n n

SOLD! The Deal Jacket Record Keeping Garage Liability & Dealer Bond Motor Vehicle Sales Tax Vehicle Inventory Tax Online Sales Out of State / Out of Country OCCC: the MVSF License Advertising Rules Federal Requirements Forms Review

We will build a deal jacket from scratch... we will role-play an actual of transfer of title at the tax office... we will do a simulation of VIT calculation, with real numbers over multiple years... and much more.

TIADA teaches you the business from an experienced, practical point of view.

Presenters will include: Dorothy Starr, Motor Vehicle Manager, Tarrant County Tax Assessor-Collector Danny Langfield, Deputy Director, TIADA Michael W. Dunagan, attorney, Jameson & Dunagan, TIADA General Counsel

g urin on t a e F ates upde Single th ticker !

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Tuesday, March 24, 2015 Fort Worth, Texas Best Western Plus 100 Altamesa Blvd. East / Fort Worth, TX 76134 817.293.3088

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Texas Independent Automobile Dealers Association

behind the wheel

Martin

What’s on Your Mind...

Tax Season

I

know tax season is a busy and exciting time for you. This is when you will move all of the inventory you’ve been stocking for the last three months.

Tax returns are rolling in and people have a little extra money in their pocket for a down payment. Your longtime customers are checking in to see what’s on your lot and fresh new faces are looking to buy. It’s a great time to be in the car business and I want you to focus on your business.

We have spilled a lot of ink in the last couple of issues detailing what’s going on in Austin and D.C., and how that might affect you as well as how you can and should get involved. But I know you didn’t get into this business hoping to find a way to become involved in the legislative process. I expect you didn’t think the easiest path to a political science degree would be through owning and operating a dealership. When I visit with our members, they always tell me how they just want to buy cars, fix cars, sell cars and make some money.

So don’t worry about the almost 6,000 bills that will be filed over the next three months. That’s what your association is here for.

At press time, 835 total bills had already been filed for the 84th regular session by Texas legislators. The good news is that, so far, TIADA has only identified a handful of the 835 bills that we need to monitor throughout the session. The bad news is that legislators

by Jeff

tiada executive director

filed 1,500 more bills last session than they did twenty years ago, so the number of bills filed each session seems to keep going up.

TIADA will sift through each bill, picking out the ones that might affect our industry, good or bad. By the time you are reading this magazine, the number of bills we are monitoring will no doubt have grown. But let’s get back to talking about what is on your mind—tax season!

Spend this time focusing on your business and selling cars and enjoy it. Remember why you originally got in the business.

But while you do that, carve out a little time on your calendar each week to visit the TIADA website and review the bills we are monitoring. It shouldn’t take you more than ten minutes. Simply go to www.txiada.com and click on “Legislative Action Center” in the Advocacy tab. From there, you can click on issues and current legislation to see all the bills we are monitoring. If an issue arises (and it will) we may call on you to write a letter or make a phone call to your legislator. The more knowledgeable you are about the issue, the better advocate you can be for your industry. If and when we need you, we will call you.

Now that you know someone is looking out for you, go rest those aching feet and that sore back. You have more cars to sell tomorrow.

Spend this time focusing on your business and selling cars and enjoying it.

46

T e x a s

D e a l e r

February 2015

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