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Also In This Issue: – Michael W. Dunagan on Handling Deferred Down Payments – Using Data and Technology at Your Dealership – 5 Fundamentals of Sales Success for Independent Dealerships

2019 TIADA Board of Directors PRESIDENT Juan Sabillón/Mi Tierra Auto Sales 7935 Gulf Freeway Houston, TX 77017 Office: 713.644.2446 Email: jmsabilló PRESIDENT ELECT Robert Beck/Stop N’Drive Motors 711 N. General McMullen Dr. San Antonio, TX 78228 Office: 210.432.1101 Email: CHAIRMAN OF THE BOARD Greg Zak/Dixon Motors 7902 North Freeway Houston, TX 77037 Office: 281.931.1300 Email: SECRETARY Mark Jones/Mike Carlson Motor Company 264 Exchange Burleson, TX 76028 Office: 817.703.7973 Email: TREASURER Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 Office: 713.641.0980 Email: VICE PRESIDENT, WEST TEXAS (REGION 1) Brad Kalivoda/Fiesta Motors 2599 74th Street Lubbock, TX 79423 Office: 806.765.3640 Email: VICE PRESIDENT, FORT WORTH (REGION 2) Eddie Hale/Neighborhood Autos 1717 US 287 Decatur, TX 76234 Office: 940.539.2272 Email: VICE PRESIDENT, DALLAS (REGION 3) Greg Reine/Auto Liquidators 39670 LBJ Freeway Dallas, TX 75237 Office: 972.780.0001 Email: VICE PRESIDENT, HOUSTON (REGION 4) Vicki Davis/A-OK Auto Sales 23980 FM 1314 Porter, TX 77365 Office: 281.354.3355 Email: VICE PRESIDENT, CENTRAL TEXAS (REGION 5) Robert Blankenship/Texas Auto Center 6809 N IH-35 Austin, TX 78744 Office: 512.280.5333 Email: VICE PRESIDENT, SOUTH TEXAS (REGION 6) Armando Villarreal/McAllen Auto Sales 4215 S. 23rd Street McAllen, TX 78503 Office: 956.668.8088 Email: VICE PRESIDENT AT LARGE Greg Phea/Austin Rising Fast 8024 IH 35 North Austin, TX 78753 Office: 512.828.0001 Email: VICE PRESIDENT AT LARGE Jose Engler/Irving Motor Corp 211 Braniff Dr. San Antonio, TX 78216 Office: 210.385.2568 Email: TIADA EXECUTIVE DIRECTOR Jeff Martin 9951 Anderson Mill Rd., Suite 101 Austin, TX 78750 Office Hours M-F 8:30am - 4:30pm 512.244.6060 • Fax 512.244.6218

Volume XIX

/ Issue 2

/ Fe b r u a r y 2 019

TexasDealer contents

4 Officers’ Message

by Ryan Winkelmann, TIADA Treasurer

11 Legal Corner: Handling Deferred Down Payments by Michael W. Dunagan

12 Upcoming Events 14 TIADA Auction Directory 2019 18 On The Cover: Where Did Tax Season Go? by Peter Salinas

24 TIADA Conference and Expo 27 Three Ways Data and Technology Can Up Your Game and Drive Long-Term Success at Your Dealership by Joe Oliveri and Steve Nicholson

30 TIADA Scholarship Application 33 5 Fundamentals of Sales Success for Independent Dealerships by Zach Klempf

37 Don’t Become the Next Headline by Les McCook

38 New Members 39 TIADA Member Application 40 Local Chapters 42 Behind the Wheel by Jeff Martin

Check Out Our 2019 Education Seminars The TIADA 2019 education schedule is now available. Turn to page 32 for more information and go to to register. 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.

Editor: Michael Spurlin

Magazine Ad Sales: Patty Huber, 512-310-9795

officers’ message by Ryan


Cash, Keys and Titles


ave you ever considered what you would do if one day you walked into your dealership, and you were missing all or the majority of your cash, keys or titles? What would the expense be to replace what you’ve lost? What reactive measures would you have to implement to ensure that it never happens again? What’s your current exposure to potential loss if fire or theft occurred? Every auto dealer reading this article most likely operates in a different way. We all have different policies and procedures that seem to work for our own business model. But what happens when they don’t? We usually revisit those procedures from a knee-jerk or sometimes imprudent state of mind to quickly sew up whatever loophole showed itself. I’m writing this article today to share a few condensed personal experiences I’ve had in the past 26 years in an effort to encourage you to review your own potential exposure to loss. My intent isn’t to advise what would work best for your particular model, but to get you thinking of areas you could be at risk.


My dealership was broken into one night last winter by a duo who obviously knew exactly what they were after, cash. As seen on video surveillance, they smashed through my front door, hunkered down on the lobby floor

BJ’s Autohaus (Houston) TIADA TREASURER

for a second then quickly made their way directly to my payment office. After several failed attempts at kicking through the entry doors, one of the thieves broke through the customer service window glass, jumped through it, and immediately went to work on a large steel lockbox that we use daily to receive cash and check payments. One or both had either been there before, or were given a crash course and instructions from someone who has. After being notified of the break-in and hearing what the thieves were after, I remember thinking of my policies I currently had in place. We consistently move cash from that steel lockbox to our safe and/or bank, and we never leave cash in our daily lockbox/cash drawer over night. Well, guess what? Not only did our cash drawer starter change of $200.00 get swiped, but so did a couple of cash payments that were accepted late the prior evening after the daily deposit was complete. I guess that unapproved and amended policy was agreeable among the collection department when complacency sets in. I guess it could have been worse. Turns out it was. My staff started prematurely cleaning up the crime scene once the police left early that morning, before reviewing our video surveillance. The lead perpetrator had removed his gloves and climbed through the broken window leaving perfect finger and palm prints all over the customer service counter on his way in (cont’d on pg. 6)

We all have different policies and procedures that seem to work for our own business model. But what happens when they don’t? 4

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Officers’ Message (cont’d from pg. 4)

and out. I realized this happened while watching our surveillance footage; fast forward to when the police left and you see my office clerk cleaning up the broken glass and promptly wiping down the counters and window trim with a bottle of Clorox clean up. Thieves: 1, Forensics: 0. I should have ordered popcorn as many times as I watched that scene unfold. What I learned/changed: • Managed my policies more closely. • Added additional lighting to the front of my building and motion activated light inside to improve facial recognition so criminals can be seen more clearly. • Added additional sirens inside the interior of my dealership, so as to increase the stress level of someone breaking in. • Replaced the customer service window with thicker material. • Never keep cash unsecured overnight in ANY amount. • Carefully review all security footage before cleaning up, even if the police have made their report. • Changed my security company’s protocol to immediate dispatch of police upon a glass-break sensor going off without the delay of prior phone calls to company principals.

Let’s move on. Loss of cash doesn’t always come from theft. Over the years I’ve learned of some employees getting kick-backs from various vendors I’ve done business with for years. One in particular was an oil and fuel additive company who offered my mechanic $1.00 for each used product cap he returned to them at the end of each month. This was an incentive I knew nothing about. Guess who was the #1 cheerleader for the quality and inherent need of the products I was spending about $600.00 per month on? Not a bad return I guess, I’ll spend $600.00 so my mechanic can count on $25.00$30.00 bucks per month. That program ended, along with the vendor’s paycheck. My sales people are approached by insurance companies all the time that offer a cash incentive for selling their discount named driver only policies to MY customers. Make no mistake, there is no our or their when it comes to YOUR customers shopping in YOUR store. Unless you have family or partners with skin in the game. I once turned a blind eye to this until I felt as though my down payments were getting cut to initiate a garbage policy with another company so my salesperson could gain another commission, in addition to the one I was paying. My attitude changed when we started our CPI program. I do not want to compete with an insurance company who’s offering kickbacks to my employees


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over protecting my own interest and the success of our CPI program. I also once spoke to an owner with a salesman who was so good he could negotiate two deals at once. One deal was for the customer who was putting $2,000.00 down, and one deal was for management with $1,500.00 cash in his hand needing an approval on the same customer. He would print two contracts and have the customer sign both (since he made a down payment mistake on one). The one printed for the customer showed $2,000.00 down, the one for our file showed $1,500.00 down. This happened several times over the course of a month until the owner personally walked in on him reprinting a deal. He didn’t show up the following day for work. He had sped customers through closings while filling his own pockets in the process! I’ll leave you with one more before closing out this section. Several years back we had a mom and a little girl who would visit our dealership every Saturday selling M&M’s as a fundraiser for their church. This went on for several months, and my employees got to know them pretty well as they would stay inside the lobby for a bit and talk. One Saturday they were making their rounds and stopped in. The little girl asked if she could use the restroom. My collector pointed her to the direction of the restroom while the mom continued talking to my employees. The girl started in the direction of the restroom with her little backpack full of M&M’s.

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When the girl hadn’t returned for quite some time, my collector left her office to check on her. She found the girl inside our unoccupied payment office, and our cash drawer was open. My collector quickly escorted the girl out of the payment office and back to her mom, and the two left. Panicking that she left the door and cash drawer open, my collector quickly notified her manager of the situation. NOT. She quickly balanced the day’s cash drawer in hopes of confirming the slightest shred of hope that the girl had not stolen any money. Remember my policy of consistently dropping cash payments from the cash drawer to the safe? It wasn’t followed that day. An 8-year-old girl and her mom walked away with just over $3,000.00 cash. I eagerly awaited the opportunity to purchase some M&M’s from the two the following week, but to no one’s surprise, they were never seen again. While we’re approaching what we hope to be a very busy month, mistakes and oversights with cash can become more prevalent. In the hysteria of trying to move inventory, multitasking and an increased work load for your employees, there is no time better to tighten up and review your procedures in protecting your cash payments.


Money wasted on keys has to be one of my biggest challenges and pet peeves. There are so many situations


involving lost or misplaced keys that it’s hard to write a good policy on protecting them from the nearly 1000 situations where they tend to disappear. There was a time that I had a thin metal lockbox that locked with a small security key. The box was located in a small hallway within customer view but in a restricted access area. It all seemed sufficient for many, many years; until it wasn’t. One night several criminals broke into the dealership and went straight for the keys. I’m not sure what they used to open the thin metal key box, but in hindsight, it wouldn’t have taken more than a screwdriver or hammer to gain entry. Within five minutes, they opened seven vehicles, and they played crash-up derby with my other vehicles, fences and building. They used the first two vehicles to slam into a vehicle we used to block our locked gate. They didn’t EPI-TIADAhalf Feb2018.pdf



get through, so they used another one to slam into our divider gate between our shop and front lot. They ended up high-centering the vehicle on a large steel pole. They then took another vehicle and slammed through our rear entry gate, totaling that vehicle, and about $20,000.00 worth of iron fence. The remaining three vehicles were driven away, never to be seen again. The days of leaving keys inside hanging in the same spot and unsecured were over. The days of leaving keys inside vehicles being repaired in our shop were over. They’re now hung on several small key-boards that come out during the day, and they are locked in a safe at night. Theft is certainly not the only ways keys end up missing. Lack of good controls and policies can lead to some expensive losses. I finance my vehicles in-house, and make a duplicate set to every vehicle I

finance. The people who have access to your duplicate keys must have top security clearance with your company and be well trusted. If not, they WILL go missing. Let the finger pointing begin. Your porter is unlocking vehicles in the morning, and tells his coworkers that he’s missing a few sets of keys. The one with access to the duplicate keys retrieves the duplicate. Then it’s business as usual until you’re selling that vehicle and notice (or don’t) that the spare isn’t in the file. Most keys these days are programmed keys and need to be cut by a locksmith. Many times I’ve had a repossessed customer show up to redeem their vehicle, and my porter drives the vehicle around to return it to the buyer. He then hands them our duplicate key that was supposed to make it back to the file. We currently tag all duplicate sets in our files with a red tag, and all

4:07 PM










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demo sets with a yellow tag. This has since solved the problem. More often, a salesperson will show a few vehicles to a prospective buyer, and the keys to the vehicle they chose not to buy end up leaving in the customer’s pocket. When writing procedures to correct some of the issues concerning keys, I also highlighted the need to get our duplicate keys cut faster upon new inventory hitting the lot. This didn’t come without a backfire of its own. When the person in charge started having the locksmith cut spare sets to trade-in’s that were headed to auction or repossessed vehicles within their redemption period. Good procedures need to be in place to prevent wasteful spending. The last and most common key matter for me involves customers who have lost their key to a vehicle I’m financing. Handling of this situation requires a good policy that fits your business as well as someone trustworthy enough to see it through. When the customer loses their key and calls your dealership to ask if you have a locksmith that can help, chances are your locksmith isn’t going to leave the dealer or auction where he’s currently cutting several sets of keys to drive across town to cut just one. Not to mention, for your duplicate key to continue working, he will need that key when making the new key in many cases. If he doesn’t the programming won’t match, and your duplicate key becomes useless. I once had a policy of collecting a $100.00 cash deposit from the customer, and their money would be returned when they returned the key. Well, when some keys started costing $200.00 or more to replace, the cheaper option was to just not return the key we loaned them on deposit, thus weakening my ability to recover said vehicle should it end up in default. This is February 2019

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a situation you cannot mismanage because they will get another key cut somehow. You will just need to assess how much risk you want

in your duplicate key potentially becoming unusable, and how far you’ll extend customer service to protect it. I’ve personally instructed my employees to see it all the way through, even if it means driving our key to their location, retrieving their vehicle, and heading straight to the location of my locksmith or another nearby in efforts to quickly close the file (with our duplicate back inside) in a timely manner. Now that’s what I call customer service!


My policies concerning the handling and securing of titles have worked really well for several years. But like an anesthesiologist, their job is pretty commonplace without much thrill until something goes dreadfully wrong. It’s the same with titles. Recently, our local distribution center where we drop our title work to be processed had a new employee who wasn’t quite trained well enough. She missed recording my liens on the (10) deals she processed from one of our packages. I noticed the error when the packages were charged full sales tax (as opposed to deferred). This wasn’t an easy fix. Not only did it take me six weeks and a separate dispute form per transaction for a refund, but I had to handle the conversations

very delicately when notifying those customers about the lien free title they would soon be receiving in the mail. I’m sure there are many ways our titles could be in jeopardy, I just don’t have too many war stories worth sharing concerning them (knock on wood). I will say that dealing with wholesalers who need me to pay for a vehicle without giving me the title in exchange, is not something I go far out on a limb for. I understand the needed float at times to use my money to clear their debt thus getting the title out of hock, but I’ve also been burned. Not as bad as some, but it still stung a bit. Keeping the title safe and sound once it’s on site also takes someone who is very trustworthy. Someone who can see through whatever procedures you have in place for securing your titles. I’ve walked in on Monday morning after a busy Saturday to find deal jackets laying around, with a title to a trade in shuffled among the paperwork. I’ve witnessed my title clerk prepare titles for transfer, then leaving for lunch while half of the work is in the copier office and the other half is spread across the desk. Losing a title pre-sale is a nightmare to get replaced the majority of the time. We have tightened that up quite a bit over the years with improved policies on tracking titles from start to finish. It is the most important document in your file, so it needs to be treated as such. I hope my short stories and experiences have shed some light on potential risks concerning your cash, keys and titles. If nothing else, I hope I inspired you to take a proactive look at your current processes to see if they need updating. If not, you could always wait until something goes wrong! So run a good fire-drill now and then. It keeps us sharp! 9


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legal corner

Handling Deferred Down Payments by Michael


t has long been the custom in the buy-here, pay-here business to allow buyers with short down-payment money the opportunity to spread the down-payment deficiency over a period of time. These payments have been variously referred to as “quick payments,” “quick notes,” “pick-up payments,” “deferred down payments,” “bump payments,” and, sometimes, “balloon payments.” Some dealers have argued that the use of deferred downs puts too much economic stress on the debtor and can actually increase the odds of defaulting. There are some serious legal implications with regard to how deferred down payments are to be disclosed and how they are to be factored into retail installment contracts. Additionally, there has been some confusion as to the proper way to handle them. So it is appropriate to review the various legal requirements that come into play. (Sometimes, special finance dealers will take side notes for deferred portions of down payments on contracts that are to be assigned to a finance company or bank. The legal and contractual restrictions against this practice and the legal complications to collecting such payments go beyond the scope of this discussion and will be reserved for a later date.) Some historical background is necessary for an understanding of the issue. There was really no problem with using deferred down payments before the enactment of the federal Truth In Lending Act and Regulation Z in 1968. However,

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since then, retail installment contracts were required to contain, among other things, a disclosure of certain terms and an annual percentage rate (APR). At that time, and for many years forward, buy-here, pay-here dealers had limited tools and resources for calculating accurate APRs. If a contract were to be paid in equal monthly payments, a one-page chart was all that was necessary to accurately calculate the APR that was required to be disclosed on installment contracts. However, since many buy-here, pay-here contracts called for weekly, semi-monthly or bi-weekly payments, these charts were not usable. There were rate-chart books for this purpose, but they, too, were effective only if the weekly, semimonthly or bi-weekly payments were all the same amount. The problem with any irregular payments (such as pick-up payments) was that they significantly altered the APR, but there was no practical way to calculate this change. Thus, an APR from a chart would not be accurate when there were irregular payments. A creditor who used a chart that was limited to




Deferred down payments have long been a part of the BHPH business model, but must be handled with care. Knowledge of the rules and insuring compliance with them are essential to avoiding problems. calculating an accurate APR when only regular periodic payments were used, would be susceptible to damages for having an incorrect APR if irregular payments were inserted into the contract. A solution to the accurate APR problem came about by switching the characterization of pick-up payments from being additional installment payments to making them part of the down payment. By excluding these irregular payments from the amount financed, it was 11

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possible to make the Regulation Z calculations on the regular payments only. The regular payments would then be of an equal amount, making the APR taken from a chart accurate. The Federal Reserve Board, which issues Regulation Z and its interpretations, recognized this method of handling pick-up payments when Regulation Z was re-written in 1981. An addition was made to the definition of down payment to allow “deferred down payments” if: t hey were all scheduled to be paid by the date that the second regular installment was due, and i f no finance charge was assessed on them. Thus, the concept of deferred down payments was officially adopted. Of course, it was necessary to show these payments on the contract as not having been paid yet (by calling them “deferred”) and by specifying the number of such payments, the dates upon which whey are due, and the amount of such payment. It was also necessary to add the payments to the total down payment and to make sure that the total amount of the deferred down payments was excluded from the amount financed so that no finance charge would be assessed against them. Standard motor vehicle retail installment contract forms were modified to adopt this method. This system worked fairly well, except that many dealers wanted to (and often did) extend the deferred down payments past the date of the scheduled second regular payment. As the cost of vehicles and the corresponding risk to car creditors rose, there was more pressure to front-load extra payments by increasing the amount and number of deferred down payments. The requirement that they all be scheduled before the second regular installment was due thus became more of a problem. One

of the items that examiners from the Office of Consumer Credit Commissioner check is compliance with the “second regular payment” limitation on deferred down payments. Recent audits have turned up violations for scheduling deferred down payments past the second regular installment. We have also recently seen some attorney demand letters sent to dealers threatening suit on alleged violations of the Regulation Z provision that requires all deferred down payments to be paid before the second scheduled regular installment. The contracts in these cases clearly violated the secondregular-installment time limit. Because these errors appeared in black and white on the respective contracts, they were “gotcha” violations that were easily proven, and for which there were no defenses. Regulation Z calls for statutory damages (meaning that the claimant doesn’t have to prove any actual damage or loss) plus attorney’s fees when a violation is shown. It appears that there are a number of websites put up by consumer attorneys across the country who specialize in finding “gotcha” violations. Debtors are finding these websites by searching the internet using keywords that indicate that they are unhappy with their car creditors (usually after repossessions). They then submit copies of the contracts for the attorneys to peruse for technical violations. With the development and advancement of personal computers and specialty dealer software in recent years, a possible alternative to having to schedule deferred down payments before the second scheduled regular installment has appeared. Assuming the software could calculate an accurate APR on a stream of payments that included some irregular payments, then the transaction could be structured in a way that would remove the “pickup payments” from of the down T e x a s

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payment box and move them to the payment schedule. If, for example, a dealer software program could accurately calculate finance charges and the APR on a contract with irregular payments, then the pick-up payments could be removed from the down-payment column, placed in the amount-financed category, and thus by-pass the “before-the-second-regular-installment” problem. Also, by placing the irregular payments in the amount financed category, finance charge could be assessed on them. It would also be necessary to use an “irregular” contract form that allowed for payment frequency other than monthly, and otherwise meets the Texas Finance Code definition of an “irregular” contract (such as the Burrell Printing Co. Motor Vehicle Retail Installment Contract No. 24-4316) . Another issue that arises regarding deferred downs is whether the failure to make a deferred down payment is a condition of default that gives rise to repossession under the contract’s security agreement. If the deferred down payments are clearly and unambiguously disclosed to buyers on the contracts so there is no question of the buyers’ obligations, the failure to comply is a default. However, some dealers have chosen to place the deferred down payments on a separate disclosure form while placing “N.A.” or zeroes in the deferred down payment blanks on the contract forms. In a recent situation, a dealer repossessed a vehicle for the debtor’s failure to pay a deferred down payment that we disclosed only on a document separate from the contract form, with no reference to deferred down payment on the contract itself. The consumer filed a complaint with the Office of Consumer Credit Commissioner. Upon review of the documents, the OCCC found that, by leaving the deferred down payments off the February 2019

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contract, the dealer did not have the right to repossess under the contract’s lien provision and was thus in violation. Deferred down payments have long been a part of the buy-here, pay-here business model, but must be handled with care. Knowledge of the rules and insuring compliance with them are essential to avoiding problems.

Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 40 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.



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MANHEIM EL PASO 485 Coates Drive, El Paso, TX 79932 915.833.9333, Fax 915.581.9645 GM: JD Guerrero Thursday, 10:00 a.m. $AVE : $100


Midland Odessa

IAA HOUSTON NORTH* 701 W. 81st Street, Odessa, TX 79764 432.550.7277, Fax 432.366.8725 GM: Christopher Rogers Thursday, 11:00 a.m. $AVE : up to $200 Sell Fee 2535 West. Mt. Houston, Houston, TX 77038 281.847.4700, Fax 281.847.4799 GM: Alvin Banks Wednesday, 9:00 a.m. $AVE : up to $200 Sell Fee 16602 East Hardy Rd., Houston-North, TX 77032 281.443.1300, Fax 281.443.4433 GM: Christina Nieves Thursday, 9:00 a.m. $AVE : up to $200 Sell Fee


Harlingen/McAllen IAA MCALLEN* 900 N. Hutto Road, Donna, TX 78537 956.464.8393, Fax 956.464.8510 GM: Ydalia Sandoval Tuesday, 9:00 a.m. $AVE : up to $200 Sell Fee

BIG VALLEY AUTO AUCTION** 4315 N. Hutto Road, Donna, TX 78537 956.461.9000, Fax 956.461.9005 GM: Lisa Franz Thursday, 9:30 a.m. $AVE : $200


ADESA HOUSTON 4526 N. Sam Houston, Houston, TX 77086 281.580.1800, Fax 281.580.8030 GM: Michael Schenks Wednesday, 9:00 a.m. $AVE : $200

AMERICA’S AA HOUSTON 1826 Almeda Genoa Rd, Houston, TX 77047 281.819.3600, Fax 281.819.3601 GM: John Swofford Thursday, 2:00 p.m. $AVE : $200

AMERICA’S AA NORTH HOUSTON 1440 FM 3083, Conroe, TX 77301 936.441.2882, Fax 936.788.2842 GM: Buddy Cheney Monday, 6:30 p.m. $AVE : $200 14450 West Road, Houston, TX 77041 281.924.5833, Fax 281.890.7953 GM: Brian Walker Tuesday, 9:00 a.m. / Thursday 6:30 p.m. $AVE : $100

MANHEIM TEXAS HOBBY 8215 Kopman Road, Houston, TX 77061 713.649.8233, Fax 713.640.6330 GM: Darren Slack Thursday, 9:00 a.m. $AVE : $100


HOUSTON AUTO AUCTION 6767 North Freeway, Houston, TX 77076 713.644.5566, Fax 713.644.0889 GM: Tim Bowers Tuesday, 1:00 p.m. $AVE : $200 February 2019

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ACV AUCTIONS** 800.553.4070 $AVE : $250

San Antonio

ADESA SAN ANTONIO 200 S. Callaghan Rd, San Antonio, TX 78227 210.434.4999, Fax 210.431.0645 GM: Clifton Sprenger Thursday, 10:00 a.m. $AVE : $200

IAA SAN ANTONIO* 11275 S. Zarzamora, San Antonio, TX 78224 210.628.6770, Fax 210.628.6778 GM: Brian Sell Monday, 9:00 a.m. $AVE : up to $200 Sell Fee




SAN ANTONIO AUTO AUCTION 6000 East Loop 281, Longview, TX 75602 903.212.2955, Fax 903.212.2556 GM: Chris Barille Friday, 10:00 a.m. $AVE : $200 5577 Highway 80 East, Longview, TX 75605 903.553.9248, Fax 903.553.0210 GM: David Cooper Thursday, 9:00 a.m. $AVE : up to $200 Sell Fee


IAA LUBBOCK* 5311 N. CR 2000, Lubbock, TX 79415 806.747.5458, Fax 806.747.5472 GM: Lori Davee Tuesday, 9:00 a.m. $AVE : up to $200 Sell Fee

AUTONATION AUTO AUCTION - HOUSTON TEXAS LONE STAR AUTO AUCTION** 608 W. Mitchell Road, Houston, TX 77037 822.905.2622, Fax 281.506.3866 GM: Mike Green Thursday, 6:00 p.m. $AVE : $200

IAA PERMIAN BASIN* 2706 E. Slaton Road., Lubbock, TX 79404 806.745.6606 Wednesday, 9:30 a.m $AVE : $75/Quarterly


LUFKIN DEALERS AUTO AUCTION 2109 N. John Reddit Dr., Lufkin, TX 75904 936.632.4299, Fax 936.632.4218 GM: Wayne Cook Thursday, 6:00 p.m. $AVE : $200 2042 Ackerman Road, San Antonio, TX 78219 210.661.4200, Fax 210.662.3113 GM: Mike Browning Wednesday, 9:00 a.m. $AVE : $100 13510 Toepperwein Rd., San Antonio, TX 78233 210.298.5477 GM: Brandon Walston Tuesday, 10:00 a.m. / Thursday, 1:30 p.m. $AVE : $200


GREATER TYLER AUTO AUCTION 11654 Hwy 64W, Tyler, TX 75704 903.597.2800, Fax 903.597.3848 GM: Wayne Cook Tuesday, 5:00 p.m. $AVE : $200


ALLIANCE AUTO AUCTION WACO 15735 I-35 Frontage Road, Elmott, TX 76640 254.829.0123, Fax 254.829.1298 GM: Carmen Robinson (Sales Manager) Friday, 10:00 a.m. $AVE : $200


TIADA Auction App turns your phone into



*Only available to current TIADA dealer members. Cash only represents redeemed discount value and does not mean actual currency.

legislative bulletin


he 86th Texas Legislative Session began last month, and TIADA is tracking the following legislation impacting independent automobile dealers in Texas.

HB 259 Thompson, Ed

This bill would require that insurance companies that sell named driver policies specifically name each driver that is NOT covered under the policy. This would help provide some actual notice to lienholders that the insurance policy will not provide any insurance coverage in the event of a claim if the householder member is operating the vehicle.

TIADA supports this bill.

HB 1087 Kuempel, John

This bill would exempt salvage operators from conducting due diligence on title review and would abolish the requirement of notifying lienholders in the event of dismantling or salvage operations for vehicles over 10 years. Any lienholder on a vehicle over 10 years in age would be at risk of having equity terminated with little recourse.

TIADA opposes this bill.

Other Issues

Vehicle Inventory Tax

Texas Tax Code Section 23.122 requires that a motor vehicle dealer’s inventory be reported by the 10th of each month and annually. Any late or misfiled filings are subject to a $500 monthly and percentage penalty per report per vehicle regardless of extenuating circumstances. TIADA supports providing additional regulatory flexibility regarding penalties and lowering the amount of the fine.

Texas Department of Motor Vehicles form VTR 136

Currently, Texas Transportation Code Chapter 501.0234 requires specific county registration requirements that are overly prescriptive and often lead to negative customer outcomes. TIADA supports

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amending the Transportation Code to provide for the expanded election of counties for vehicle registration if the dealer and the customer agree. This will allow greater consumer flexibility while ensuring prompt title servicing.

Credit Card Surcharges

Texas Business and Commerce Code Section 604A.0021 currently prohibits a business from passing along a surcharge or credit card fee to a customer and the business must incur the credit card fee. Recently the U.S. District Court for the Western District of Texas recently declared Tex. Bus. Com. Code 604A.0021 to be unconstitutional. TIADA supports formally repealing this section and also requests revisions to applicable sections of the Texas Finance Code to harmonize with the court’s ruling.

Texas Department of Licensing and Regulation Service Contracts

Many automobile dealers in Texas used to offer service contracts to their customers as part of a vehicle sale. However, this changed in 2011 when the Texas Occupations Code Chapter 1304.151 was amended to require a funded reserve deposit requirement of $250,000 or a net worth over $100 Million. This higher limit has had a chilling effect on the ability of small automobile dealers to participate in this market. TIADA supports a more reasonable security deposit amount for independent automobile dealers. Those of you who have followed this process in the past know that print version of “legislative updates” 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 TIADA website under Resources/Legislative Action Center. As always, we welcome the input of our members regarding legislative matters. Our legislative team will work diligently to keep you abreast of the issues and call on you to act when needed.  17

on the cover by Peter Salinas

TIADA Contributor


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The majority of tax refunds are in consumers’ hands by the end of February, meaning that Tax Season, as we knew it, has changed dramatically.

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on’t blink or you might miss it. While this may be an overstatement, many Texas dealers have become keenly aware that “Tax Season,” once known as the most prosperous time of the year for automotive retailers, is not what it used to be. Some dealers have accepted this compressed version and don’t look at it much differently than a holiday sale like Black Friday, while others still expect their lots to be full of prospects holding large IRS tax refund checks. The federal government passed the PATH (Protecting Americas from Tax Hikes) Act in 2015, which changed a number of tax laws pertaining to individuals, families, and businesses. One aspect of the law, designed to thwart fraudulent refunds by identity thieves, mandates that the IRS not process a tax return for those who claim the Earned Income Tax Credit or Additional Child Tax Credit until Feb. 15. Given that date, the overwhelming majority of these tax refunds are in consumers’ hands around Feb. 27–28, meaning that Tax Season, as it used to be, has changed dramatically. Dealers, for decades, would load up on inventory in the fourth quarter in anticipation of the refunds being handed over to them as big down payments in the first quarter of the new year. The new laws, the advent of IRS e-Filing, direct ACH deposits and third-party programs designed to “pull ahead” the refunds with the promise of payment when the refund arrives or Refund Anticipation Loans, has made the refund marketplace different, at best, and nearly non-existent for some. “Those days of an extended Tax Season are gone,” said Bill Neylan, CEO of TRS Tax Max, a Tampa, Fla.-based, national company providing consumers with tax preparation and e-filing services and automotive retailers with a program designed to capture consumer tax refunds as down payments on used vehicles. Neylan has provided these services, which have changed over the years in reaction to IRS rule changes and changes in technology, for more than 24 years. There are few competitors providing the services he provides in the marketplace, though some chain tax preparation companies still provide refund anticipation loans to consumers for a fee. Kyle Chapman, owner of Kyle Chapman Motors, a three-store buy-here, pay-here chain with stores in Austin, Buda/Kyle, and San Marcos, Texas, said his Tax Season used to run from midApril through mid-May when all refund checks were mailed to recipients. With the advent of e-filing and the PATH Act, he’s seen his season shrink dramatically. “Last year, and I never saw this before, we had people come in with their refunds during a four-day period,” said Chapman, whose lots move about 125 units a month on average. “It was like super busy from February 22–26, then just went back to normal. We may sell four or five vehicles a day at our lots, but last year during that time, we sold 25 vehicles.” Five to seven years ago, Chapman said if he sold 100 units a month, he could expect to sell 200 units in Tax Season, now he might jump from 125 units a month to 175. “We’ve tried to be proactive in our response to the changes, 19

but with the way the laws and technology have changed things, it’s been difficult to predict what to expect,” he said. “We build up our inventory and get the vehicles ready to sell, until it goes away. Then we have to go out and get more. Last year, when early March rolled around, we had a lot of cars to buy, and prices were high, because everyone was in the same boat.” David Brotherton, NIADA 20 Group moderator and dealer consultant, said tax season has changed and become more compressed over the years, but another challenge for the buy-here, pay-here dealer was subprime finance companies buying deeper and cutting into the typical buy-here, pay-here customer base. He said that has eased up a bit as subprime companies have tightened their credit requirements, giving back some market share to buy-here, pay-here dealers. Brotherton noted that programs, like the one from TaxMax that allows consumers to promise to pay the dealer using a future refund as a portion of the down payment to buy a vehicle in the fourth quarter, do work. “I’ve worked with several dealers who use the program and it works well for them,” Brotherton said. “I caution that it requires training, strong communication with the customer and attention to detail.”

Dealers Auto Auction of OKC 1028 South Portland Oklahoma City OK, 73108 PH:405/947/2886 9:00 am Consignment Sale 800+ units every week




He said the refund window is very small compared to previous years, and by increasing that window through programs such as this or Refund Anticipation Loans, it can add to a dealer’s bottom line. “What you don’t want to do is change your underwriting or your policies because you are getting a bigger down payment during this time of year,” Brotherton said. “If a customer hasn’t lived at the same address for more than three months in a row, or doesn’t have a full time job, that person just isn’t someone you should approve for a contract, despite the bigger down.” Keith Hagler, owner of Taylor Auto Credit, a two-rooftop buy-here, pay-here operation in Taylor, Texas, said Tax Season has certainly been compressed, but he still sells more cars, and still has to beef up his inventory in the fourth quarter to prepare properly. “For the last five years, it seems like the window has gotten smaller,” he said. “We were having this conversation among our management team the other day, and all we could agree on is that we know as much about what we know, as what we don’t know.” Lowell Rogers, owner of 11th Street Motors in Beaumont, Texas, said he sells higher-end buyhere, pay-here vehicles, and used to work on a model where he collected 20% down payments to close most deals. His small operation sells just 15–20 units a month, and he enjoys tax season because it’s easier to get the larger down payments. “That would mean $1,800 to $2,000 per copy,” Rogers said. “We had to move away from that model, because it just limited our customer base. “Anyone in this business can sell cars if you take $500 down on a high-risk customer and then just go repo the car if the customer defaults,” Roger said. “There are people here in town that do just that and had to change the name of their store three times. We don’t operate that way, and we get a lot of repeat and referral business.” Rogers said that he doesn’t use the tax pull ahead programs though he did for a short time years ago. “If a customer comes in, and says he’s waiting on an IRS refund, it has not stopped us for doing the deal,” he said. He added he can call the IRS Hotline and find out for his customers how large their check will be and when it will come. It’s both a service for his customer and important information for the dealership. Rogers said he has had some issues with T e x a s

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The tax refund window is very small now, compared to previous years, but increasing that window through Refund Anticipation Loans can add to a dealer’s bottom line.

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stocking up his inventory in the past several years. He typically bulked up in the fourth quarter in preparation for tax season. Then a couple of years ago, he did just that, and ended up with a lot full of over-aged inventory. “It was a big expense for us,” Rogers said. “We watch more carefully now, and fill in as we need to. If we have to pay a little more, it’s better than taking a huge hit with 10 or 20 over-aged vehicles. I fill up the lot and leave room to make sure I can get out of every car and not lose money.” Rogers said he typically keeps 30 vehicles in his inventory and sells 15 units a month. During tax season, he may keep 45 units on the lot and sell 25-30. In the past few years, Hagler has changed up his business model. He had three locations, and has scaled back to two. He’s also increased the ACV of the units he sells, so customers have to come up with larger down payments, and IRS refund checks certainly help with that. “If Dave Brotherton were in front of me and told me not to adjust my underwriting during tax season, I’d certainly agree with him,” Hagler said. “But there’s not a dealer out there that, when starting at a $3,000 down payment, didn’t find a way to overlook something.” Hagler said his dealerships use GPS tracking devices, so locating a vehicle in the event of a default is far easier than it once was. “Technology has made this whole business better,” he said. “As far as tax season, most buy-here, pay-here dealers have a limit to how many vehicles they can sell. In our business, you can sell yourself right out of business.” Hagler has not used any of the “pull ahead” programs, as he finds them a lot of work and there’s a good deal of training that must occur among the staff. He said he works with an H & R Block franchise in town that secures refund anticipation loans for some of his customers. It is important to note that using refund anticipation loans, pull ahead programs, or taking “irregular” payments as a down payment later during the finance contract period requires the dealer to be mindful of Reg Z, Truth in Lending laws, and other FTC laws and regulations. Be sure to check with your lawyer, accountant, or the TXIADA to ensure the program you use meets all Texas and federal laws and regulations. Not surprisingly, dealers expressed doubt about these numbers, and indicated they were hesitant to take a promise of $500 paid months later. Wayne Cook, owner of Salty’s Auto Sales in Lufkin, Texas, said he’s seen many changes in Tax Season over the past 40 years. His two lots in Lufkin, Texas, sell just over 40 units a month. “Tax season has always accounted for 25 - 30% of our business,” he said. “It’s still about that, but the time in which it occurs is much shorter. We haven’t used tax pull ahead programs, and we’ve always been successful. We’re a small lot, and only have 13 employees, including mechanics at our reconditioning facility, so we don’t have a lot of time for training with new programs.” 21

Cook said he doesn’t see the value in having a customer who may or may not make a payment six, seven, or eight months later, so he’s continuing to stock up on vehicles when he can, and move them out when the checks do arrive, and replace them as necessary. Neylan noted that when a consumer needs a vehicle he or she doesn’t consider whether it’s tax season or not. He said if a dealer knows a consumer will have extra money when their refund check arrives, it should be incentive for dealers to consider using a formalized tax refund pull ahead program. Cook said it makes sense to get a larger down payment during tax season, but you need the right vehicles on the lot. That may be a little easier for Cook, who has owned and operated Greater Tyler Auto Auction in Tyler, Texas since 2001. The auction serves Northeast Texas, Oklahoma, Western Louisiana and Western Arkansas. Cook said he always sees a bump in sales and prices in the late fourth quarter and early part of year as dealers gear up for Tax Season. “What we’ve also seen in recent years is more dealers holding on to vehicles they can sell to subprime customers and cash buyers,” Cook said. “Franchised dealers who typically would have flipped vehicles


they took in trade, are now looking at keeping them, at least for a while, to see if they can retail out of them. If that doesn’t work, they bring them to us. It’s not new, but if that occurs during Tax Season, then prices will rise, just because there are fewer vehicles available to wholesale.” Brotherton said when taking a down payment from a customer based on his refund, it’s important not to take the whole thing. “You want to leave the customer with enough money to pay other outstanding debt or get some of the things they absolutely need,” Brotherton said. “That’s very important. The other thing is to remind customers who are behind in their payments at this time of year, that they can quickly get caught up and back in good standing if they use part of the refund to do so. It requires good communication, and good practices from your collections team.” Cook added that he would agree with Brotherton, but noted that big down payments may make the difference between denying a customer and signing them up. “I think everyone is a little guilty of changing up their policies a bit when it comes to a big down,” Cook said. “Hey, Columbus took a chance.”

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Dealer Academy Presents

Facebook / Instagram Workshop: Increase Sales and Measure Your ROI Presented by Andrew Street, CEO, Dealer OMG. Andrew Street, former Facebook employee best known for digital marketing for auto dealers, has cutting-edge insight into social media. This jam-packed session will explore the finer points of Facebook and Instagram marketing for dealers and go far beyond the quest for likes. Through this half-day course you can expect to:

8:30am - 12:00pm $149 Members, Each Additional $99 (must be from same dealership)

$299 Non-members

• Discover Facebook and Instagram’s value proposition and how it relates to your dealership • Take away free actionable steps to ensure your website and Facebook presence are easy for customers to find • Learn how to have your inventory go through car shoppers’ personal mobile newsfeed • Master the simple formula to budgeting your Facebook & Instagram ads campaigns to reach customers frequently • Get introduced to intuitive and free apps that can make your dealership stand out in people’s newsfeed • Walk through a case-study of a BHPH store that grew from 43 cars/ month to 65 /month by leveraging a specific digital strategy • Review the steps to identifying your Facebook & Instagram ROI and how to improve the return Who Should Attend: Any dealer GM or Owner who is tired of not knowing their advertising ROI. Dealers who want to be the store that is going through people’s personal social media newsfeeds, where their customers spend an average of about an hour per day.

Monday, February 25, 2019 Austin, Texas Crowne Plaza Austin 6121 North IH-35, Austin, TX 78752 512.323.5466 Register online at: w w w . t x i a d a . o r g /e d u c a t i o n For more information or to register over the phone, please call the state office at 512.244.6060 Texas Independent Automobile Dealers Association

The best dealers in Texas, the best education anywhere.

Save the date

July 21–23, 2019 JW Marriott San Antonio Hill Country Resort & Spa


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Atlanta, GA Austin, TX Baton Rouge, LA Birmingham, AL Bowling Green, KY Chicago, IL


Dallas, TX Detroit Toledo, OH Greenville, SC Harrisburg, PA Houston, TX Interstate 94, MI

Jacksonville, FL Lancaster, PA North Houston, TX Pensacola, FL Pittsburgh, PA St Louis, MO




TUESDAYS & THURSDAYS AT 1PM 219 N. Loop 12 Irving, Texas 75601 Phone: 972.445.1044

Tulsa, OK Virginia Beach, VA West Michigan, MI


16611 South IH 35, Buda, Texas 78610 Phone: 512.268.6600 Houston


1826 Almeda Genoa Rd, Houston, Texas 77047 Phone: 281.819.3600

AuctionCredit is located within each of our Texas facilities for all of your auction financing needs.

North Houston


1440 FM 3083 Conroe, Texas 77301 Phone: 936.441.2882

feature Three Ways Data and Technology

Can Up Your Game and Drive Long-Term Success at Your Dealership by Joe Oliveri , KAR Auction Services, Inc. and Steve Nicholson, TradeRev


f you’re anything like the average consumer, you spend five hours each day on your smartphone — maybe more. You’re probably doing more than catching up on the news and scrolling through your social media feed. You’re researching purchases, big and small, you’re buying birthday presents and maybe you’re even ordering dinner or scheduling a grocery delivery. There’s an app for just about everything — and some of them even help make your life easier or improve productivity, if you can figure out how to use them. Technology and data have completely redefined how consumers interact with the world around us. It’s not just about replacing Columbia House’s mail-order CD club with iTunes and Spotify or Blockbuster with Netflix and Hulu. It’s more than just the ease of pre-ordering a custom drink so you don’t have to wait in line at the coffee shop. It’s about reducing friction and adding convenience to every consumer interaction — across every facet of your life. The good news is that it’s not just consumers profiting from this boon. Technology and data are racing their way up the supply chain into the wholesale automotive marketplace — and as dealers, you can benefit. You now have more information and resources at your fingertips than ever before to make smart, informed decisions — faster than ever. Here’s three ways you can do more to increase both margins and profits.

Start with Smarter Sourcing

The average car buyer visits just 1.6 auto dealerships while car shopping; that’s a big change from 15 years ago, when buyers visited an average of five dealerships. On the other hand, 41% of used car shoppers don’t purchase a vehicle from the first dealership they visit because the dealer didn’t have what they wanted. Why is this important? It means inventory matters. Consumers are doing their research before they ever set foot on your lot. In fact, there’s a good chance they know more than your sales team about the specific vehicle they want. So if you don’t have what they want — they won’t stop by, or they’ll quickly move on. So how do you source the right cars? The first

step is adopting a 360° approach to your

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remarketing strategy. In lane, dealer-to-dealer, mobile apps, and online — the choices abound when it comes to marketplaces for buying and selling used vehicles. By adopting a holistic 360° approach to your remarketing strategy — maximizing what each venue has to offer — you can ensure you have access to the broadest array of inventory at the best prices.

Going digital first goes hand-in-hand with adopting a 360° approach to your remarketing strategy. While it’s important to not limit yourself

to one channel for inventory acquisition, some of the best quality, most attractively priced inventory is available first through digital channels. It’s the first opportunity to bid on cars before they go to physical auction, and also broadens your geographic reach for finding good cars at a great price. Whether it’s a dealer-to-dealer mobile auction marketplace or an online auction, these digital and mobile channels typically offer great vehicles and lower fees. Plus, they’re always on, allowing you to bid from anywhere at any time. So, if you aren’t already including these channels in your strategy — and seeking them out first — you’re missing out on some great inventory.

Tap into Big Data

Big data isn’t just for big companies. Your customers take advantage of big data and analytics when doing their car-buying research — and now you can, too. The past decade has brought many new tools to market that can help dealers optimize their lots. New data and technologies can help dealers not only acquire the right inventory, but sell it smarter and faster. The right tools can increase both your cash flow and your profit margin.

Find the right vehicle with new targeted recommendations. It’s all about efficiency — get-

ting the right car to the right dealer and then to the right consumer at the right time. New mobile and digital marketplaces have given dealers access to virtually unlimited inventory options — but your time is precious, and there aren’t enough hours in a day to sort through all the options. Today’s remarketing platforms increasingly help take the leg work out of this for you. For instance, Some can analyze millions of data points each day to make specific, tailored dealer buy recommendations for your 27

TEXAS, YOU’RE IN GOOD HANDS TradeRev is proud to have JENNIFER HAWXHURST, Regional Sales Director, leading the Texas market. With a wealth of knowledge from her previous leadership role at CarMax, Jennifer is helping dealers move metal faster.

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Want to know more?

rooftop. These tailored recommendations assess market dynamics, whether a vehicle is under-supplied, and This is just a teaser. what moves from your Join us in Dallas lot quickly — just to on March 25 for a name a few. Still want to do your TIADA dealer education own research? There Workshop. See page are many apps that 32 for details. seamlessly integrate your vehicle pricing guide, market report and VHR subscriptions into one easy-to-use interface, so you don’t have to flip between multiple platforms — saving you time when buying on trade, shopping online or in the lane. Just remember: a vehicle sitting on your lot is a rotting asset. Make you sure you buy it right from the start — and if it’s not selling, get rid of it, and start flooring something that data shows will sell, and at higher margins.

Up Your Retail Game

Using data to source the right vehicles and optimize your lot is a great start, but don’t overlook opportunities to improve your retail game, too. It can also help you better understand your customer and make every customer interaction a positive experience — helping differentiate you from the other dealer across the street. In fact, 77% of consumers have chosen, recommended, or even paid more for a brand that provides a personalized service or experience.

Know your customers and their online habits. Are they a traditionalist who always pulls the February 2019

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vehicle history report and checks Consumer Reports first? Or, are they a cost-conscious consumer glued to their smartphone who spends more than 17 hours price comparing online before stepping foot in a physical dealership? A digital-first retailing approach can yield invaluable data about your customers, helping you better target your sales approach and close the deal — whether it’s the “Is it right for me?” or “Can I afford it?” interactions. Make it personal. We’ve gotten spoiled, and expect every in-person shopping experience to be as personalized and painless as Amazon or Apple. Consumers want it to be a unique, personalized experience — whether chatting in the check-out line with the friendly cashier who never forgets your name or bingewatching your new favorite show that Netflix recommended based on previously watched shows. Why should you care? Consumers will pay more for it: 54% would buy from a dealership that offers their preferred experience, even if it didn’t have the lowest price. It’s not rocket science; combining the right products at the right price with a personalized customer experience will help you sell more cars, profitably. Joe Oliveri is General Manager of Data as a Service at KAR Auction Services, Inc., the parent of more than 20 automotive remarketing brands and services including ADESA, TradeRev, AFC and Autoniq. Steve Nicholson is Director of Major Dealer Accounts at TradeRev, North America’s leading dealer-to-dealer digital auction platform. Both will be presenting the TIADA seminar The Competitive Investment: Integrating Data Analytics & Technology into Your Dealership Strategy on March 25th in Dallas. Turn to page 32 for more information. 29



Marvin Norwood Scholarship DEADLINE

May 10, 2019 {Applications and/or any required documents received after May 10, 2019 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.

Date: Name:


Address: City:



Email: (You will received email confirmation of receipt.)

Telephone Number: High School Last Attended:

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


3. Each applicant must complete the application form.

Date of Graduation:

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

Other High Schools Attended (Names and Addresses):

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).






Dates of Attendance:

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:



Sponsor Signature Should you have any questions, please contact TIADA at 512.244.6060. 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 2019

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Dealer Academy Education Offerings for Spring 2019

Instructor-Led Courses From Inventory Acquisition to Tracking Service Department Metrics: Getting and Selling the Right Vehicle Is the Bottom Line Presented by Brent Carmichael, Executive Conference Moderator, 20 Groups. NCM Associates, Inc. and the Staff of ADESA Houston. This workshop is uniquely designed to cover the service department essentials that will increase your bottom line. It will also include hands-on, interactive training that will allow you to inspect vehicles and learn exactly how to spot the most commonly overlooked types of vehicle damage. 9:00am - 3:00pm

$199 TIADA Members, Each Additional $149 (must be from same dealership), $399 Non-members MONDAY, MARCH 18, 2019, HOUSTON

The Competitive Investment: Integrating Data Analytics & Technology into Your Dealership Strategy Presented by Joe Oliveri, General Manager, Data as a Service, KAR Auction Services, Inc. and Steve Nicholson, Director of Major Dealer Accounts, TradeRev. In this workshop, learn how your dealership can use analytics to harness data to provide meaningful insights and leapfrog the competition. Gain practical tips to reap benefits from the digital revolution, including how to diversify your sales approach by incorporating new technology at your dealership. 8:30am - 12:00pm

$149 TIADA Members, Each Additional $99 (must be from same dealership), $299 Non-members MONDAY, MARCH 25, 2019, DALLAS

Leadership, Management & Coaching Presented by Jay Rose, President, Global Training Solutions & VP AutoLoop Independent dealers wear many hats and this one-day seminar is geared toward helping a large cross section of dealers from owners, general managers, sales managers, internet mangers, comptrollers and any key employee who wants to see your dealership grow. Attend this workshop with your biggest challenge written down and you will leave with an action plan on how to implement change, get the results you want and make 2019 your best year.

$249 TIADA Members, Each Additional $149 (must be from same dealership), $499 Non-members 9:00am - 4:00pm


BHPH Compliance: A Comprehensive Workshop

Presented by Michael W. Dunagan, TIADA General Counsel and author of the standard-setting books, “Dealer Financing of Used Car Sales” and “Texas Automobile Repossession: A Lien Holder’s Legal Guide.” This revitalized seminar is the final answer in BHPH compliance. Mike speaks dealer, and with 40 years of experience representing hundreds of BHPH dealers, he knows your business inside and out.

$249 TIADA Members, Each Additional $199 (must be from same dealership) $499 Non-members 9:00am - 4:00pm


Register online at or by phone at 512.244.6060. Texas Independent Automobile Dealers Association


5 Fundamentals of Sales Success for Independent Dealerships by Zach Klempf

Founder & CEO, Selly Automotive


hat keeps you up at night about your business? If you are like most independent dealership owners, you have one thing on your mind: How do I sell more vehicles? It is a simple question with a complicated answer. Which tactics will have the most significant impact on your sales? Choosing the wrong ones could cost you valuable time and money you can’t afford to lose. Here is what I recommend to dealers who ask me about increasing sales: Start with the fundamentals. You could waste years of your life trying different tricks and tips, but if you don’t have the fundamentals in place, you will not see the results you want. The fundamentals of automotive sales success boil down to just a few key strategies. Let’s look at each strategy in detail.

Five Fundamentals of Sales Success


Identify Your Niche

Dealerships used to be the first stop in the carbuying journey. Customers would visit a lot to explore their options and learn what was available. After visiting numerous dealerships, they would narrow down their preferences and make a decision. Today, the internet has flipped the car-buying journey on its head. Instead of visiting dealerships, customers first conduct research online. Once they have narrowed down their choices, they will visit the dealer and complete the sale. This is where your niche plays a role. Having a niche helps you stand out at the most critical moment: When customers are ready to make a purchase. According to NADA, the average car buyer visits only 1.2 dealerships before making a sale. If you can convince a customer to visit your dealership, you have an excellent chance to sell a vehicle. There is a basic tenet of business strategy that says if you can’t be the biggest or the cheapest, you have to choose a focus — also called a niche. Niches work because once a customer has narrowed down their interests, they want options. If someone decides they want a Toyota Tundra pickup truck, they will choose to visit a used truck dealership with 12 Tundras over a general used car lot with just a few.

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It’s best to base your niche on a market segment where you already perform well. If trucks and SUVs are your most profitable segment, then get rid of the coupes and sedans. If most of the vehicles you sell are under $10,000, then focus on low-cost vehicles exclusively. By focusing on a profitable niche, dealers can attract customers when they are ready to make a purchase. You can stand out by being the best dealership in that niche, something far easier to accomplish than being the biggest or cheapest.


Treat Your Website Like a Digital Showroom

According to Deloitte, car-buyers spend an average of 10 hours doing research online before even stepping foot onto a dealership lot. That means your website is your first impression with a potential customer. If you don’t make a good one, you could lose a sale forever. Most dealers put a lot of effort into their physical showrooms but spend a fraction of that time on their website. Because of the way people buy cars today, this mistake could be deadly. If your website is ugly, confusing, or just plain generic, you will have a hard time attracting customers to your dealership. That’s why building and maintaining a strong online presence is just as important as maintaining your dealership lot’s physical presence. All outstanding dealership websites have the same core traits: • They are easy to navigate • They are responsive (i.e., work on mobile) and search engine optimized • They feature professional photography and comprehensive listings • They make financing options clear and easy to understand • They highlight what makes the dealership unique (i.e. why your store) Highlighting the unique aspects of your dealership is especially important for standing out from the competition. This is where having a niche is vital. Your website should speak directly to your target customer, whether you exclusively sell trucks, imports, or vehicles under $10,000. Your website should also advertise services or features that are attractive to your customer niche, like 33

no credit loan approvals or bilingual sales associates. Dealerships who spend time on their “digital showroom” are going to see more customers walking into their physical showroom.


Create an incredible customer experience

Car-buyers today shop differently than those of the past. Today’s online shopper does not like interacting with salespeople or company representatives until they absolutely have to. They would rather conduct their own research online before talking with you.

What does this mean for your dealership? When a customer does fill out an online form, they are serious about buying. What happens next in the customer experience is critical to closing the sale. When a prospect sends you a message or fills out an online lead form, they are testing you. They want to see if you are going to take care of them if they become a customer. This is a test you cannot fail, or you will never see that prospect again. An incredible customer experience is responsive and personalized. Here are three ways to accomplish both:

Follow up fast. When a customer contacts your dealership, they are ready to make a purchase. Being the first dealership to follow up with a customer could be the deciding factor in making a sale. This doesn’t mean you have to constantly watch your inbox and drop everything to respond. In fact, the best dealerships automate their follow-ups using a CRM. This automated reply will show the customer you are on your A-game and will take care of them. Understand Your Customer. CRMs not only help dealerships follow up fast, but they also keep customer 34

information organized and at your salespeople’s fingertips. You will blow customers away with what you “remember” about them — from their occupation to vehicle preferences — and you will look more conscientious and personable in the process.

Video Follow-Ups. If you really want to go above and beyond to wow your customers, try sending a personalized video follow-up to each internet lead. This tactic takes a little more time, but imagine the impression it makes on a customer. Not only do they get a follow-up response, but a completely customized, face-to-face video message.

Video messages have proven to be highly effective. According to VidYard, companies saw a 500% increase in email conversions when they included a personalized video. VidYard is a great tool for personalized messages. Another option is Bomb Bomb, which is more affordable but with fewer bells and whistles.


Be Data-Driven

It’s no secret that new car dealerships have more money to blow than independents. This fact makes it all the more important for small and midsized dealerships make data-driven decisions. Dealerships waste a lot of money on marketing channels that simply don’t work. Whether it’s lead providers or social media ads, dealers need to know where their sales are coming from and optimize those channels. There are two steps to measuring the ROI of your marketing channels:

Track your lead sources. The first step is to know where your deals are coming from. Some CRM tools offer features that let you track the conversion of each lead source. T e x a s

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Measure the effectiveness of each source.

Once you start tracking your leads, you can then measure the ROI of each source. Valuable metrics to track include cost per lead and most importantly, cost per sale. With this information in hand, you will be able to cut the least effective channels and funnel that money into your most effective channels.


Stay Compliant

This final point may seem obvious, but it is amazing how many dealerships risk non-compliance every day. For a small dealership, facing litigation could be a death sentence. The smaller you are, the more important it is to make sure everything you do is up to code. Customer communication is where many dealerships get into trouble. New TCPA compliance guidelines are cracking down on spam from businesses, and this includes text messages. Here is the definition of spam according to the TCPA guidelines: The term “unsolicited advertisement” means any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.

As a dealership, if you don’t get expressed consent from a customer to text them, you risk violating TCPA guidelines. Moreover, you must also give customers an “opt-out” choice so they can stop receiving your messages at any time. Maintaining compliance is difficult to do on your own. Dealerships should utilize an automotive CRM to formalize communication with customers. This also protects your dealership internally. If a salesperson is fired, there is no way for them to leave with important customer data.

Seeing Results with an Automotive CRM

Improving sales starts with perfecting the fundamentals. As you might have noticed, many of the strategies described above require new tools, specifically an automotive CRM. The CRM is your hub for lead management and customer service. It will also help you stay compliant and provide you with data to make better marketing decisions. Whether you’re a one-man show or a team of 50, a CRM will help you nail the fundamentals of sales success and take your dealership to new heights. 

Zach Klempf is the Founder & CEO of Selly Automotive. He can be reached via email at

Garage Liability Kevin Smith Insurance is now Tri-State Dealer Services. With expansion and coverages being available outside of Texas, we’ve changed our name to better suit the areas of our growing agency.


Tri-State Dealer Services is one of the largest writers of Garage Liability in the state. We work with several A+ rated companies which offer exceptional rates to car dealers and repair shops. Call today for a “quick” 10-minute quote! WE ALSO OFFER THESE COVERAGES:

8739 Davis Blvd. Keller, TX 76248

800-687-3236 / Fax (817) 581-1921

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F&I • Vehicle Service Contracts • GAP Insurance • Tire & Wheel Vehicle Protection Products • Property • Wreckers 2 Car Haulers • Cargo • Dealer Bonds • Personal Lines 35


THE IMPORTANCE OF COMPLIANCE It is your responsibility to ensure your agents are compliant and qualified. The Consumer Financial Protection Bureau (CFPB) intends to deal with every consumer complaint and how you deal with it will define your institution. To manage third-party risk, the CFPB follows the FDIC risk management process: 1. Risk assessment 2. Due diligence in selecting a third party

3. Verified training & testing 4. Oversight


feature Don’t Become the Next Headline by Les McCook

Executive Director, American Recovery Association


aving grown up in the buy-here, pay-here world I am very familiar with the challenges dealers face in daily business life. The challenges have changed with time, but in today’s business environment compliance may be the largest challenge, as well as the most convoluted. When it comes to repossessions and compliance it is a little more clear, but there’s still a lot of gray area. As more state attorneys general develop their own consumer protection bureaus, we predict to see more action taken on behalf of consumers alleging wrongful repossessions. Of course, we are already seeing our share of what we used to call “ambulance chasers” now becoming “repo chasers” filing personal injury claims in record numbers. Some recent headlines:

In each of these cases, we’re sure to see large payments from the lenders, with one of the major claims being “negligent hiring,” the other being an FDCPA claim because the lender lost the right to self-help repossession when there was a “breach of the peace.” The precedent for the FDCPA claim lies within a decision by the Northern District of Ohio, Vantu v. Echo Recovery, L.L.C. This decision held that a repossession agency, while generally not subject to liability under the Fair Debt Collection Practices Act, becomes subject to February 2019

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such liability when it undertakes to repossess collateral that it does not have a present right to possess. Obviously, accidents happen during the recovery process, but most of the cases making headlines today aren’t due to accidents. They occur because the repossessor is poorly trained. Today, more than ever, it is crucial the dealer conduct their due-diligence on their repossession agency to be certain they understand and operate according to the latest laws and regulations that govern the repossession process. The minimum requirements for a recovery professional should include a General Liability Commercial Policy ($1m limit / $3m aggregate) including Wrongful Repossession ($1m limit), a clear understanding of the FDCPA, SCRA, UDAAP, and Breach of Peace and Bankruptcy. Additionally, there are local regulations applying to the agent in your area as well. Another serious challenge dealers are facing is how to find qualified, compliant recovery professionals in other states when their customer skips. This headline was in the news last month: “Fraud Alert — Lender Trap.” The article details that a California based credit union sent a repossession assignment to a company advertising itself online as operating in California. The process turned into a nightmare, with the company refusing to release the vehicle unless they pay a $3,087 “Contingency Fee.” Over the years I have worked on several of these types of accounts. In these cases, it is rare that a dealer gets the car back. The company in every case is This company claims to be in every state, but in reality, they are simply reassigning the accounts to unsuspecting agents, who are just trying to do a good job for a client, only to find out they are now ensnared in a scam. I do want to point out that there are some great 37

repossession companies with “Speedy” in their name, several being members of ARA, so please don’t confuse them. In conclusion, a quick Google search for a repossessor does not offer you any guarantees that you are choosing a qualified, compliant professional. I strongly suggest you begin your search by looking for a recovery professional that is a member of a national trade association, such as the American Recovery Association. At a minimum, reach out to the state IADA where your skip is located and ask for a referral.

If there is ever a way that I can assist you or if you have any questions about finding compliant and professional repossessors, please reach out to me by email or phone. The American Recovery Association is a proud member of the TIADA and support many of the state chapters.  Les McCook is the Executive Director of the American Recovery Association. He can be reached by email at: or by phone at 972-755-4755.

Please Welcome Our Newest TIADA Members DEALER MEMBERS AVIS Car Sales, LLC – Katy (Main) Ellen Mintzer 22413 Katy Freeway Katy, TX 77450 AVIS Car Sales, LLC – McKinney Ellen Mintzer 3512 N Central Expressway McKinney, TX 75071 Amex Auto Group Michel Williams 720 Lincoln Green Drive Apt. 1907 Arlington, TX 76011 Brown Family Auto Sales LLC Kendra Brown 6510 N. Shepherd Dr. Houston, TX 77091 CarLotz John Foley 611 Bainbridge St Richmond, VA 23224 C E Auto Sales Jonathan Leal 2012 N Alexander Baytown, TX 77520


Clear Choice Automotive Charles Lambrecht 3803 San Pedro Ave San Antonio, TX 78212

Main St Motors Sammy Brasher 106 Clark St Hallsville, TX 75650

Tricolor Auto – Temple Kevin Lazalde 3301 S. General Bruce Drive Temple, TX 76504

Ganas-Ya! – Garland Nancy Diaz 12000 E. Northwest Hwy., Suite BU2 Garland, TX 75218

NDG Motorz Omoniyi Ogunlaja 1550 Westbrough Dr., #8202 Building #8 Katy, TX 77449


Ganas-Ya! – S. Freeway Cleila Brenes 4450 S. Freeway Fort Worth, TX 76115

ROXSTAR MOTORS Brian Todd 205 Happy Ln Red Oak, TX 75154-8858

Ganas-Ya! – CF Hawn Darwin Lopez 8315 CF Hawn Fwy Dallas, TX 75217

T & R Auto Sales, LLC Rose Galbreath-Washington 565 S. Mason Rd, 414 Katy, TX 77450

Gilliam Auto Sales Joe Gilliam 1116 North US Hwy 281 Marble Falls, TX 78654

Top W Autos Brandon Wilkerson 1705 Florence Rd. Killeen, TX 76549

Joe’s Trucks Center Aymen Al-Haj 12112 FM 529 Rd Houston, TX 77041

Tricolor Auto – Corpus Christi Daniel Chi 4121 South Padre Island Drive Corpus Christi, TX 78411

Luxury Auto Works Thomas Dere 8300 North Lamar Blvd Austin, TX 78753

Tricolor Auto – Midland Alejandro Gomez 2800 W Wall St Midland, TX 79701

1st Adjusters James Waldron 9506 Brown Lane Austin, TX 78754 Dealer Resources 360 Richard Baird 21011 Antonia Manor Ct. Richmond, TX 77406 Freedom Warranty Dan Acree 117 Lee Parkway Dr Chattanooga, FL 37421-8600 KEYMOTIVE INC. Mark Maupin 1223 Corporate Dr E Suite G Arlington, TX 76006 Talkinto Catherine Sisson 9330 Scranton Rd., Suite 300 San Diego, CA 92121 Texas Premier Safeguard Justin Wagner 600 Century Plaza Drive, Suite C105 Houston, TX 77073

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TIADA texas independent automobile dealers association

Become a TIADA Member Business Name: ____________________________________________ Select one:

Dealer Member

TIADA texas independent automobile dealers association

Associate Member

Contact Person: ____________________________________________ Address: __________________________________________________ City: _________________________________________ State: _______

Membership Dues:

Zip: __________________ County: _____________________________


E-mail address: _____________________________________________

Dues include NIADA and local chapter membership where applicable.

Business Phone: _______________________ Fax: ________________________ Cell Phone: ___________________________________________ 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: __________________________________________________ Sec.Code: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Expiration Date: ____________ Monthly Payments - $41.58 per month Via Credit Card (Please enter card information above) Via Bank Draft (Authorization Agreement 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


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.

February 2019

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Local Chapters CORPUS CHRISTI G.R. Moore The Car Shack 361.813.2466 (dates announced at DALLAS COUNTY Graham Latrhop VP Auto Sales 972.864.1300 (dates announced at EL PASO Ricardo Gardea Cars Plus 915.778.8285 Meeting – 3rd Friday (Monthly) FORT WORTH David Byrd Byrd Autos 817.915.2185 Meeting – 4th Thursday of Jan–May and Sep–Oct HOUSTON Rudy Roudbari Sarco Enterprise 713.672.3950 Meeting – 2nd Tuesday (Monthly) SAN ANTONIO Jose Engler Irving Motors Corp 210.385.2568 (dates announced at VICTORIA Rowdy Ransom RTR Motors 361.484.6526 Meeting – 1st Monday (Monthly) 40

resource guide The TIADA Website:

Members can log in with their username/password and access our Dealer Member Directory, Legislative Action Center, Compliance 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 Knowledge Base.

Texas Department of Motor Vehicles 888.368.4689

Office of Consumer Credit Commissioner 800.538.1579

Texas Comptroller





American Recovery Association 972.755.4755 or contact TIADA state office

FORMS Burrell Printing


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You’re The High Bidder!


behind the wheel


A Simple Thanks


his marks the fourth year that I have used the February issue to share some of the positive comments we receive while doing our best to represent you and your industry. This job is very rewarding in so many ways but hearing from our members is one of the greatest rewards we receive. “Thanks for the information. You were very helpful. We were able to answer questions to our customer’s satisfaction and all is well now. I am so happy I am a member of TIADA. ” — Sharon, Bostick’s Auto & Truck Sales, Brownwood “Great thanks. I have a customer threatening me with legal action and I wasn’t sure if there was a specific clause. I didn’t figure there would be. Thanks for the quick reply. We love TIADA!!” —G  raham, VP Auto Sales, Garland “I just wanted to say you guys are doing a great job and thank you for inviting me to be on the committee. It was informative and I plan on taking advantage of all the resources you offer so that I can stay compliant! The OCCC review went great. The examiner’s name was Tom and he is a real class act. Thanks for your help in getting me prepared. He was impressed that I had Michael Dunagan’s books and Texas Dealer magazine. I couldn’t have done it without TIADA’s help! Time to sell more cars!” — Matt, Texas Car Connect, Tomball “Thank you. That was very helpful. We are having a better day now. ” — Gina, Buy N Drive Auto Sales, Dallas


by Jeff


“Hi, I just wanted to say, ‘Thank you for today!’ It was a great presentation and I have learned many new things that I can share here at the dealership. Great Job!” — Becky, Midtown Motor Co., San Antonio “Thank you for listening, Mr. Dunagan! We are not accustomed to unreasonable customers that bully and harass us. You are very generous to provide time, assurance and counsel to Dealers and TIADA Members. It’s nice to have a valuable resourceful person, like you, to discuss difficulties with. Thank you for your feedback and recommendations. We appreciate your call back today.” — Rome, Auto Class Direct, Plano “I just cannot express how happy I am to sign up with you guys, I told the same thing to Chris as well. You guys rock! Cok Tesekkurler. Merry Christmas! PS. we will sign up for the classes as well.” — Giray, SFG Auto, Austin Sharon, we are happy when your customer is happy. Graham, glad we could help, seems everyone threatens a lawsuit these days. Matt, you are class act too. Becky, thanks for attending the chapter meting and thanks for your feedback. Rome, we agree, Mike is pretty dang valuable. Gina, our favorite thing is to make someone’s day better. Giray, good thing we have someone who can speak Turkish on our team or we wouldn’t know that Cok Tesekkurler means thanks — sounds pretty good in any language though. T e x a s

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