Texas Dealer March 2022

Community Involvement

and

Your Dealership

Also In this issue:

– Michael W. Dunagan: Fraudulent Mechanic’s Lien Claims Still Concern Car Creditors – Skip Tracing Meets LPR – 5 Successful SEO Secrets to Help Your Dealership – Does Your Dealership Have a Customer Feedback Loop?

D M BU RI OR V SI E E TO N YO OLS ES U TO S R

EV EN

GET STARTED NOW AT ACVAUCTIONS.COM

VALUE, BUY, SELL AND MANAGE WITH CONFIDENCE AND TRANSPARENCY.

TIADA Board of Directors PRESIDENT Mark Jones/MCMC Corporate 264 Exchange Burleson, TX 76028 PRESIDENT ELECT Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 CHAIRMAN OF THE BOARD Robert Beck/Stop N’ Drive Motors 711 N. General McMullen San Antonio, TX 78228 SECRETARY Eddie Hale/Neighborhood Autos PO Box 1719 Decatur TX 76234 TREASURER Vicki Davis/A-OK Auto Sales 23980 FM 1314 Porter, TX 77365 ICE PRESIDENT, WEST TEXAS V (REGION 1) Cesar Stark/S&S Motors 7699 Alameda Ave. El Paso, TX 77915 ICE PRESIDENT, FORT WORTH V (REGION 2) Chad Lancaster/Chacon Autos 11800 E. Northwest Hwy Dallas TX 75218 ICE PRESIDENT, DALLAS V (REGION 3) Greg Reine/Auto Liquidators 39670 LBJ Freeway Dallas TX 75237 ICE PRESIDENT, HOUSTON V (REGION 4) Russell Moore/Top Notch Used Cars 900 East Davis Conroe, TX 77301 ICE PRESIDENT, CENTRAL TEXAS V (REGION 5) Robert Blankenship/Texas Auto Center 6809 Suite B S IH35 Austin, TX 78744 ICE PRESIDENT, SOUTH TEXAS V (REGION 6) Armando Villarreal/McAllen Auto Sales, LLC 4215 S. 23rd St McAllen, TX 78503 ICE PRESIDENT AT LARGE V Brad Kalivoda/Fiesta Motors 2599 74th Street Lubbock, TX 79423 ICE PRESIDENT AT LARGE V Greg Phea/Austin Rising Fast 8024 IH 35 North Austin TX 78753 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 jeff.martin@txiada.org

Vo l u m e X X I I / I s s u e 3 / M a r c h 2 0 2 2

TexasDealer contents

4 Officers’ Message

by Mark Jones, TIADA President

7 TIADA Scholarship Application 8 TIADA Auction Directory 11 Legal Corner: Fraudulent Mechanic’s Lien Claims Still Concern Car Creditors

by Michael W. Dunagan

12 Upcoming Events 17 Dealer Spotlight 19 Awards and Scholarships Compiled by TIADA staff

20 On The Cover: Cause Marketing: Community Involvement and Your Dealership

by Stephen Pallas

24 2022 TIADA Conference & Expo 32 TIADA Membership Application 33 Regulation Matters: TIADA Successfully Defends the Independent Automobile Industry in Texas

by Earl Cooke

39 Skip Tracing Meets LPR

by Alex “SkipGuru” Price

40 New Members 41 5 Successful SEO Secrets to Help Your Dealership

by Usman Haq

42 Local Chapters 43 Does Your Dealership Have a Customer Feedback Loop?

by Bill Springer

45 Behind the Wheel

by Jeff Martin

Did You Know? TIADA is now accepting nominations for Quality Dealer of the Year! This is the most prestigious award offered to Independent Automobile Dealers in Texas. Please see page 19 for more information.

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: Stephen Pallas

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

officers’ message by

Buying vs. Leasing Your Dealership Location

J

ust like so many topics in our industry, the issue of whether it is best for you to own your dealership’s real estate or to lease the property has always had dealers on both sides of the aisle. This month let’s discuss some pros of buying or leasing the land for your dealership. Depending on your business and situation, this will hopefully help you think through which of these options works best for you at this moment in time.

Pros of Buying Your Location(s) Tax

Benefits Individual tax strategies might be one

of the significant reasons a dealer might want to purchase their lot. There are many attractive tax breaks associated with buying your dealership property: interest deductions, write-offs, depreciation, and even as a tool to defer capital gains taxes, to name a few.

I’m not sure there is anything more “friendly” than buying your property, at least from a tax perspective.

(NOTE: I am not a tax professional — ­ please consult your tax professional to discuss the above tax advantages.)

Accumulation

of Equity We all know how crazy

real estate market prices are here in Texas right now, and owning/buying your store would seem to be a safe place to build equity and long-term wealth at the same time. Whether you purchase the location in all

Mark Jones

MCMC Corporate (Burleson) TIADA PRESIDENT

cash or finance the property, the increasing costs of labor, materials, and land, in general, are likely to not only protect your investment – but supply you with a nice profit in the future. Additionally, over time as equity builds in the property, the option of refinancing and taking significant tax-free cash out of the property’s equity is another appealing consideration for some dealers.

Become

your Own Landlord Hopefully, the easiest person you will ever find to negotiate with is yourself! No more limiting lease contracts, everincreasing rent monies, or wondering whether the landlord will even renew your lease. Having complete control over what changes you need to make to the facility and when you do them is a powerful thing.

Removing the worries of restrictions and renewing lease contracts will allow you to focus more on running your business day-to-day and making more profit.

Rental

/ Passive Income A widespread strategy

dealers use when buying their dealership is to purchase the property themselves or through an LLC. The dealership immediately becomes the primary tenant and generally pays 15-25% more rent than the actual mortgage payment. This creates additional cash flows for the owner(s) and allows their business (tenant) to pay

The issue of whether it is best to own or lease your dealership property has always had dealers on both sides of the aisle.

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March 2022

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for their asset. Often, there are other smaller buildings or unused space on the property that the dealership is not utilizing. These become additional opportunities for rental income for the LLC/Owner.

to find another larger or smaller location without the worries of finding a buyer for the existing property.

Once the lease is over, the owner can simply walk away and move into their next location that better fits their needs.

Pros of Leasing Your Location(s)

No

N o Down Payment Means More Liquidity –

Most commercial real estate purchases will require a 10–25% down payment to buy. Depending on your cash position and needs, those dollars might be much better utilized to grow or continue to expand your dealership. Rising inventory costs are just one reason a dealer might choose to hold onto their cash rather than use it to purchase property. Typically, the only money required upfront is a normal month’s rent security deposit and maybe a few small incidentals with a lease. Undoubtedly, choosing to lease your location requires much less cash out of pocket.

Flexibility to Grow/Shrink Business – Another

advantage of leasing property is the ability to change your business model without a long-term commitment to the property you are using. Often, a dealer will find that their business has expanded to the point that they need more space to continue their growth.

Other dealers may be in the “winding down” stages of their careers and require less space. Most leases are 3–5 years in length, allowing the dealer the flexibility

Major Repairs and Maintenance –

Compared to buying real estate, leasing has the advantage (in most cases) of deferring any major expenses back to the landlord. Extensive repairs that can cost thousands to fix are generally not your responsibility, depending on the lease agreement you sign. By choosing to lease rather than buy, you effectively eliminate significant unforeseen expenses that can show up without notice. Especially for newer dealers that may just be getting started, this ensures that a “surprise does not dramatically change your cash flows.”

Many Texas dealers’ situations and long-term plans are quite different from each other. Because of that, I think it is fair to say that this subject clearly does not have a “one-size-fits-all” answer. Evaluate your unique position, and don’t hesitate to speak to some of our fellow TIADA members to get input or advice on whether they have chosen to buy or lease their property. Happy selling either way, and I look forward to seeing you at this year’s TIADA Conference & Expo!

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March 12/17/20 2:30 2022 PM

ATTENTION STUDENTS!!!

$1,000

Marvin Norwood Scholarship DEADLINE

May 13, 2022 {Applications and/or any required documents received after May 13, 2022 will NOT be accepted.}

SCHOLARSHIP APPLICATION Date: Name:

DOB:

Address: City:

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.

State:

Email: (You will receive an 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.

Address:

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).

March 2022

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Zip:

City:

State:

Zip:

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:

State:

Zip:

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

7

TIADA Auction Directory

Save thousands on buy or sell fees at these participating auctions! * VALID FOR SELL FEE ONLY AT INSURANCE AA LOCATIONS ** ONLINE AUCTION AVAILABLE

Abilene ALLIANCE AUTO AUCTION ABILENE

www.allianceautoauction.com 6657 US Highway 80 West, Abilene, TX 79605 325.698.4391, Fax 325.691.0263 GM: Brandon Denison Friday, 10:00 a.m.

$AVE : $200

C.M. COMPANY AUCTIONS, INC. www.cmauctions.com

2258 S. Treadaway, Abilene, TX 79602 325.677.3555, Fax 325.677.2209 GM: Gregory Chittum Thursday, 10:00 a.m. $AVE : $200

IAA ABILENE*

www.iaai.com 7700 US 277, Hawley, TX 79601 325.675.0699, Fax 325.675.5073 GM: Shawn Lemke Thursday, 9:30 a.m.

$AVE : up to $200 Sell Fee

Amarillo IAA AMARILLO*

www.iaai.com 11150 S. FM 1541, Amarillo, TX 79118 806.622.1322, Fax 806.622.2678 GM: Shawn Norris Monday, 9:30 a.m.

$AVE : up to $200 Sell Fee

Austin ADESA AUSTIN

www.adesa.com 2108 Ferguson Ln, Austin, TX 78754 512.873.4000, Fax 512.873.4022 GM: Michele Arguijo Tuesday, 9:00 a.m.

$AVE : $200

ALLIANCE AUTO AUCTION AUSTIN

www.iaai.com 2191 Highway 21 West, Dale, TX 78616 512.385.3126, Fax 512.385.1141 GM: Geoffrey Rabb Tuesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

METRO AUTO AUCTION AUSTIN www.metroautoauction.com 8605 Cullen Ln., Austin, TX 78748 512.282.7900, Fax 512.282.8165 GM: Brent Rhodes 3rd Saturday, monthly

$AVE : $200

Corpus Christi CORPUS CHRISTI AUTO AUCTION

www.corpuschristiautoauction.com 2149 IH-69 Access Road, Corpus Christi, TX 78380 361.767.4100, Fax 361.767.9840 GM: Hunter Dunn Friday, 10:00 a.m.

$AVE : $200

IAA CORPUS CHRISTI*

www.iaai.com 4701 Agnes Street, Corpus Christi, TX 78405 361.881.9555, Fax 361.887.8880 GM: Patricia Kohlstrand Wednesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

Dallas-Ft. Worth Metroplex ADESA DALLAS

www.adesa.com 3501 Lancaster-Hutchins Rd., Hutchins, TX 75141 972.225.6000, Fax 972.284.4799 GM: Allan Wilwayco Thursday, 9:30 a.m.

$AVE : $200

ALLIANCE AUTO AUCTION DALLAS

www.allianceautoauction.com 1550 CR 107, Hutto, TX 78634 737.300.6300 GM: Brad Wilson Wednesday, 9:45 a.m.

www.allianceautoauction.com 9426 Lakefield Blvd., Dallas, TX 75220 214.646.3136, Fax 469.828.8225 GM: Robert Kersh Wednesday, 1:30 p.m.

AMERICA’S AA AUSTIN / SAN ANTONIO

AMERICA’S AA DALLAS

$AVE : $200

www.americasautoauction.com 16611 S. IH-35, Buda, TX 78610 512.268.6600, Fax 512.295.6666 GM: Jamie McCollum Tuesday, 1:30 p.m. / Thursday, 2:00 p.m.

$AVE : $200 8

IAA AUSTIN*

$AVE : $200

www.americasautoauction.com 219 N. Loop 12, Irving, TX 75061 972.445.1044, Fax 972.591.2742 GM: Ruben Figueroa Tuesday, 1:00 p.m. / Thursday, 1:00 p.m.

$AVE : $200

IAA DALLAS*

www.iaai.com 204 Mars Rd., Wilmer, TX 75172 972.525.6401, Fax 972.525.6403 GM: Bob Bannister Wednesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

IAA DFW*

www.iaai.com 4226 East Main St., Grand Prairie, TX 75050 972.522.5000, Fax 972.522.5090 GM: Julissa Reyes Tuesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

IAA FORT WORTH NORTH*

www.iaai.com 3748 McPherson Dr., Justin, TX 76247 940.648.5541, Fax 940.648.5543 GM: Jack Panczyk Tuesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

MANHEIM DALLAS**

www.manheim.com 5333 W. Kiest Blvd., Dallas, TX 75236 214.330.1800, Fax 214.339.6347 GM: Rich Curtis Wednesday, 9:00 a.m.

$AVE : $100

MANHEIM DALLAS FORT WORTH**

www.manheim.com 12101 Trinity Blvd., Fort Worth, TX 76040 817.399.4000, Fax 817.399.4251 GM: Nicole Graham-Ponce Thursday, 9:30 a.m.

$AVE : $100

METRO AUTO AUCTION DALLAS**

www.metroaa.com 1836 Midway Road, Lewisville, TX 75056 972.492.0900, Fax 972.492.0944 GM: Scott Stalder Tuesday, 9:00 a.m.

$AVE : $200

El Paso EL PASO INDEPENDENT AUTO AUCTION www.epiaa.com 7930 Artcraft Rd, El Paso, TX 79932 915.587.6700, Fax 915.587.6700 GM: Luke Pidgeon Wednesday, 10:00 a.m.

$AVE : $200

IAA EL PASO*

www.iaai.com 14651 Gateway Blvd. W, El Paso, TX 79927 915.852.2489, Fax 915.852.2235 GM: Jorge Resendez Friday, 10:30 a.m.

$AVE : up to $200 Sell Fee T e x a s

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MANHEIM EL PASO

www.manheim.com 485 Coates Drive, El Paso, TX 79932 915.833.9333, Fax 915.581.9645 GM: JD Guerrero Thursday, 10:00 a.m.

$AVE : $100

IAA MCALLEN*

www.iaai.com 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**

www.bigvalleyaa.com 4315 N. Hutto Road, Donna, TX 78537 956.461.9000, Fax 956.461.9005 GM: Lisa Franz Thursday, 9:30 a.m.

$AVE : $200

Houston ADESA HOUSTON

www.adesa.com 4526 N. Sam Houston, Houston, TX 77086 281.580.1800, Fax 281.580.8030 GM: Brian Wetzel Wednesday, 9:00 a.m.

$AVE : $200

AMERICA’S AA HOUSTON

www.americasautoauction.com 1826 Almeda Genoa Rd, Houston, TX 77047 281.819.3600, Fax 281.819.3601 GM: Ben Nash Thursday, 2:00 p.m.

$AVE : $200

AMERICA’S AA NORTH HOUSTON www.americasautoauction.com 1440 FM 3083, Conroe, TX 77301 936.441.2882, Fax 936.788.2842 GM: Buddy Cheney Tuesday, 1:00 p.m.

$AVE : $200

AUTONATION AUTO AUCTION - HOUSTON www.autonationautoauction.com 608 W. Mitchell Road, Houston, TX 77037 822.905.2622, Fax 281.506.3866 GM: Juan Gallo Friday, 9:30 a.m.

$AVE : $200

HOUSTON AUTO AUCTION

www.houstonautoauction.com 2000 Cavalcade, Houston, TX 77009 713.644.5566, Fax 713.644.0889 President/GM: Tim Bowers Wednesday, 11:00 a.m.

$AVE : $200

IAA HOUSTON*

www.iaai.com 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 T e x a s

www.iaai.com 16602 East Hardy Rd., Houston-North, TX 77032 281.443.1300, Fax 281.443.4433 GM: Aracelia Palacios Thursday, 9:00 a.m.

$AVE : up to $200 Sell Fee

IAA HOUSTON SOUTH*

Harlingen/McAllen

March 2022

IAA HOUSTON NORTH*

D e a l e r

Midland Odessa IAA PERMIAN BASIN*

www.iaai.com 701 W. 81st Street, Odessa, TX 79764 432.550.7277, Fax 432.366.8725 Thursday, 11:00 a.m.

$AVE : up to $200 Sell Fee

www.iaai.com 2839 E. FM 1462, Rosharon, TX 77583 281.369.1010, Fax 833.595.8398 GM: Adriana Serrano Friday, 9:30 a.m.

ONLINE

MANHEIM HOUSTON

E-DEALERDIRECT**

$AVE : up to $200 Sell Fee

www.manheim.com 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

www.manheim.com 8215 Kopman Road, Houston, TX 77061 713.649.8233, Fax 713.640.6330 GM: Darren Slack Thursday, 9:00 a.m.

$AVE : $100

Longview ALLIANCE AUTO AUCTION LONGVIEW www.allianceautoauction.com 6000 East Loop 281, Longview, TX 75602 903.212.2955, Fax 903.212.2556 GM: Chris Barille Friday, 10:00 a.m.

$AVE : $200

IAA LONGVIEW*

www.iaai.com 5577 Highway 80 East, Longview, TX 75605 903.553.9248, Fax 903.553.0210 GM: Edgar Chavez Thursday, 9:00 a.m.

$AVE : up to $200 Sell Fee

Lubbock IAA LUBBOCK*

www.iaai.com 5311 N. CR 2000, Lubbock, TX 79415 806.747.5458, Fax 806.747.5472 GM: Chris Foster Tuesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

TEXAS LONE STAR AUTO AUCTION** www.lsaalubbock.com 2706 E. Slaton Road., Lubbock, TX 79404 806.745.6606 GM: Dale Martin Wednesday, 9:30 a.m

ACV AUCTIONS**

www.acvauctions.com 800.553.4070

$AVE : $250

www.e-dealerdirect.com chris@edealerdirect.com

$AVE : Up to $500/month

San Antonio ADESA SAN ANTONIO

www.adesa.com 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*

www.iaai.com 11275 S. Zarzamora, San Antonio, TX 78224 210.628.6770, Fax 210.628.6778 GM: Paula Booker Monday, 9:00 a.m.

$AVE : up to $200 Sell Fee

MANHEIM SAN ANTONIO**

www.manheim.com 2042 Ackerman Road San Antonio, TX 78219 210.661.4200, Fax 210.662.3113 GM: Mike Browning Wednesday, 9:00 a.m.

$AVE : $100

SAN ANTONIO AUTO AUCTION**

www.sanantonioautoauction.com 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

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

$AVE : $200

$AVE : $75/Quarterly

Waco

Lufkin

ALLIANCE AUTO AUCTION WACO

LUFKIN DEALERS AUTO AUCTION

www.lufkindealers.com 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

www.allianceautoauction.com 15735 I-35 Frontage Road Elm Mott, TX 76640 254.829.0123, Fax 254.829.1298 GM: Christina Thomas Friday, 10:00 a.m.

$AVE : $200

9

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T e x a s

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March 2022

legal corner

Fraudulent Mechanic’s Lien Claims Still Concern Car Creditors Dealer Question: We’ve located one of the vehicles we’ve been

looking for in a mechanic shop. The owner tells us that, to get our vehicle back, we must pay the repair charges he claims were authorized by our customer. Can he hold the vehicle despite our prior recorded lien?

Answer: In Texas, a valid mechanic’s possessory lien supersedes a

perfected security interest in a vehicle.

W

hen our state’s constitution was written and approved by voters in 1876, one of the things considered important enough to include was a “Mechanics, Artisans, and Material Lien” provision. Since our current constitution predated the invention of the motor vehicle, the lien was probably intended to cover the labor of blacksmiths and buggy makers and similar types of businesses.

Article 16, Section 37 of the Constitution of the State of Texas of 1876 (there was an earlier constitution approved in 1845, but was replaced after the Civil War) provides: Mechanics, artisans and material men, of every class, shall have a lien upon the buildings and articles made or repaired by them for the value of their labor done thereon, or material furnished therefor; and the Legislature shall provide by law for the speedy and efficient enforcement of said liens.

While the creation of a lien to protect honest and honorable mechanics, artisans and material men was probably a good idea, and has no doubt served those folks well over the years, it probably never crossed the minds of the constitutional drafters that

March 2022

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this provision would be used by crooks, thieves, and opportunists to take property from the rightful owners.

The problem for car creditors and vehicle-mortgage-lien holders: Texas statutes give valid mechanic’s liens a “super-lien” status, making them superior to prior, recorded and perfected title liens and security interests. This “super-lien” status has made vehicle mechanic’s liens a very attractive property right, one that has drawn the attention of many people – some who aren’t mechanics.

The Texas Department of Motor Vehicles (TxDMV) had at one time estimated that around 50 per cent of all mechanic’s-lien foreclosure applications involved fraudulent or improper claims. One county tax assessor-collector put the fraudulent or questionable claim figure at more like 70 per cent, and her testimony to that effect before the Texas Senate Transportation and Homeland Security Committee raised some eyebrows. But no matter whose estimate you take, it was clear that there was a problem.

It was in the spirit of achieving a balance between the legitimate goals of mechanics and repair shops for the “speedy and efficient” enforcement

Michael W. Dunagan by

TIADA COUNSEL

of their rights, and the need for the state and for owners and lien holders of vehicles to be protected from fraud and theft, that in 2009 TIADA initiated, and the Texas Legislature passed, reform legislation.

The goal of the legislation was to deal with the problem in a way that didn’t interfere with the rights of those who do follow the law and use the lien in the manner and for the purposes that the drafters of the constitution contemplated.

Many of the abusers of the mechanic’s-lien law were not mechanics at all. In fact, one of the major targets of the legislation was the use of fraudulent mechanic’s liens by persons wanting to “wash” liens from vehicles that were purchased or acquired from debtors without awareness of the lien status. Creating fictitious mechanic’s-lien claims, sometimes using non-existent repair shops, was a way to obtain a free-and-clear title certificate to the vehicle.

We have also run into thieves who would apply for a mechanic’s lien to a vehicle, often within a few days after the vehicle was sold by a dealer to a retail purchaser, raising the implication that the purchase was part of a conspiracy to obtain title to the vehicle. Some of the thieves would attach counterfeit postal receipts (or in some cases legitimate receipts from empty envelopes that contained a fake return address) to their mechanic’slien applications, without having given notice to anyone. The vehicles 11

Upcoming Events 2022 TIADA DEALER ACADEMY

Online registration available.

Check TIADA’s education schedule online for seminar postings. www.txiada.org

April 4 From Inventory Acquisition to

Tracking Service Department Metrics – Getting and Selling the Right Vehicle is the Bottom Line Crowne Plaza Arlington 700 Avenue H East, Arlington, TX 76011 817.394.5000

OTHER TIADA EVENTS April 25 Board of Directors Meeting Austin, TX

July 24 Board of Directors Meeting Kalahari Resort Round Rock, TX

24–26 TIADA Conference and Expo Kalahari Resort Round Rock, TX

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were then sold to innocent individuals and dealers using the mechanic’s-lien titles issued by the state.

In a massive prosecution, the U.S. Attorney for the Western District of Texas a few years ago obtained convictions against 19 individuals from Texas, New Jersey, and Arizona who conspired to wash titles and strip liens to approximately 800 vehicles using, among other devices, fraudulent mechanic’s liens.

Many of the victims of those crimes were Texas BHPH dealers.

Other schemes we’ve seen to abuse mechanic’s liens include: Tow-truck drivers who have

“bought” bad checks given to vendors for repairs or parts, then repossessed the vehicles and demanded as much as $2500 threatening to file for a mechanic’s lien.

One debtor filed a statement in

court that he had responded to an ad in the Green Sheets offering a fee to persons who were about to be repossessed for turning over their vehicles to the advertiser.

After this debtor turned over the vehicle and was paid his fee, the advertising party promptly filed a fraudulent mechanic’s lien application.

Collusion between debtors and

friends or relatives who may or may not be mechanics to create a mechanic’s lien is a common occurrence. Some vehicles under a mechanic’s-lien claim have been found in back yards of residences (true shade-tree “mechanics”).

Some mechanic’s lien claims

include storage charges and/or

The goal of the legislation was to deal with the problem in a way that didn’t interfere with the rights of those who do follow the law and use the lien in the manner and for the purposes that the drafters of the constitution contemplated. rental car charges. These charges don’t qualify for the super-lien status of valid charges for parts and labor.

Under the mechanic’s-lien processing system, anyone can submit an application for a mechanic’s lien through a county tax collector’s office, which forwards it to the TxDMV. Except for certain counties that scrutinize the applications, such as Tarrant and Dallas Counties, little or nothing is done to check the accuracy of the claim, or whether the services were actually rendered (Tax Assessor John Ames of Dallas County has appointed an investigator in his office to look for all types of title fraud, including mechanic’s-lien fraud).

If the paperwork appears to be in order, the state will issue a negotiable title, free and clear of any lien or security interest, to the applicant.

The only way to stop the issuance of mechanic-lien title is for a real party in interest (such as a secured party) to file a lawsuit naming as defendants the applicant and the State of Texas, seeking an injunction against the T e x a s

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issuance of the title.

Recent changes to the law, sought

by TIADA, have made it more difficult for those without a legitimate claim to game the system. For instance, notice of a lien claim now has to be made to the county tax office prior to the application going to TxDMV for processing. The tax office then sends notice of the lien, with the information about it, to all registered owners and lien holders, who will have an opportunity to intervene if the claim is not legitimate. Deadlines were also established for filing lien claims.

Another change to the law is that a mechanic’s-lien claimant has to give registered owners and lien holders the opportunity to inspect the vehicle. It had been common for mechanic’s-lien claimants to refuse access to vehicles or even disclosure their location. Additional information is now required to be submitted with an application, including the legal name of the applicant, an employer I.D., the actual location that the repair took place, and a copy of a signed work order (prior law did not require a signed work order). Franchised dealers, who have not been a part of the problem, are exempted from these additional requirements.

If an applicant for a mechanic lien doesn’t comply with the new requirements, any lien foreclosed upon is inferior to a prior recorded mortgage lien. Also, conviction for the submission of false or misleading information with a mechanic lien application is a class B misdemeanor.

While the number of reported fraud cases involving mechanic’s liens is down drastically since implementation of the abovedescribed changes, suspicious claims are still being filed that appear to be intended solely to strip the car creditor’s lien from the title. Third parties, who are attracted to the “super-lien” status of mechanic’s liens, have been formulating schemes to obtain mechanic’s lien rights March 2022

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against vehicles, including the financing of repairs in exchange for the assignment of the mechanic’s lien. After the debtor defaults on the financing agreement, the finance company would repossess the vehicle and demand that the secured party pay the repair charges, interest (sometimes as high as 300 per cent) and repossession and storage fees to get the vehicle back.

TIADA sought additional protections for secured parties in the 2015 session of the Texas

Legislature. To make it more difficult for third parties to take assignment of mechanic’s liens (and thus obtain “super” lien status), amendments were added that: made it clear that release of

possession of a vehicle by a mechanic upon receipt of payment (other than by a bad check or stopped credit charge) would extinguish the mechanic’s lien, and provided that a mechanic’s right

to possession of a vehicle under a lien could not be assigned to a

.

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third party that advanced loan proceeds for repairs.

What can a secured car creditor do to protect its lien interest from fraudulent mechanic’s-lien claims?

Here are some suggestions: Titles should be timely

transferred to perfect security interests and to place the creditor’s lien in the state’s title records. If a title hasn’t been transferred, the lien holder’s position isn’t perfected against most third-party claims, and the lien holder is not entitled to notice on mechanic’s and storage lien claims.

All mechanic’s lien claims should be investigated. Determine if the listed shop even exists. Shops are now required to allow lien holders to see the work order and other paperwork, and examine the vehicle. Take along a master mechanic who can tell whether the work has in fact been done.

In one fraudulent-lien-claim case,

the mechanic quickly dropped a $5,000 engine-overhaul bill when an expert witness confronted him with evidence that the engine still had its original parts, and the block had simply been painted.

A certified mechanic can make a good witness at trial if litigation over the matter ensues. There is little that can be done, however, if the vehicle gets sold and disappears before your expert can make his inspection. Photos and videos can also be used to assist in evaluating whether work was actually performed, or was done properly.

We’ve seen cases where mechanics

felt that they were entitled to s mechanic’s lien by virtue of having signed work orders, even though they admitted that the jobs had never been done.

If the claimed work appears to have been performed, and the work appears to have been authorized by the owner, and the charges are reasonable, the charge can be paid to redeem the vehicle.

resource guide The TIADA Website: www.txiada.org

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 through the Calendar of Events, access our online membership application, find contact information for all our Local Chapters, and access many additional resources through our Knowledge Base.

License Renewal Certificate

TexasDealerEducation.com

Texas Department of Motor Vehicles 888.368.4689 www.txdmv.gov 14

Office of Consumer Credit Commissioner 800.538.1579 occc.texas.gov

Texas Comptroller

800.252.1382 comptroller.texas.gov

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

Or, an attempt can be made to negotiate a lower amount for the parts and services provided.

If a mechanic’s-lien claim appears to be fraudulent, it may be necessary to file suit to seek a court order directing a sheriff or constable to take possession of the vehicle pending a trial on the dispute. The party seeking the writ must swear to facts sufficient to justify the issuance of the order and must post a bond. But if the value of the vehicle justifies the cost, this is an effective method of forcing the claimant to prove the authorization for the work and the completion of the work under oath. It can also protect the vehicle from sale or alteration pending the trial.

One possibility is to simply pay

the disputed lien charge to get the vehicle, then sue for money damages to the extent you can prove the charges are improper.

The down side of this procedure is that the type of persons who files false lien claims often don’t have the assets to satisfy a judgment.

Another suggestion we make

is that lien holders encourage their customers to come to them when problems arise. Of course, if the customer is part of the conspiracy to create a bogus lien, there is little the creditor can do to prevent this from happening.

But refusing to assist customers in repairs and sending them away with a reminder that they are responsible for repairs is a surefire way to have mechanic’s-lien claims placed on vehicles.

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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From Inventory Acquisition to Tracking Service Department Metrics – Getting and Selling the Right Vehicle is the Bottom Line

Dealer Academy Presenter

This workshop is uniquely designed to cover the service department essentials that will increase your bottom line. You will also find out how these practices are being implemented in various dealerships around the state.

Brent Carmichael,

Executive Conference Moderator, 20 Groups.

NCM Associates, Inc. (with a Dealer Panel)

Time

9:00am - 4:00pm

Cost

$249 Members, Each Additional $199

(must be from same dealership)

Crowd favorite Brent Carmichael with NCM Associates will share his service knowledge covering points that include: • Inventory acquisition • Finding/Hiring/ Training Technicians • Reconditioning – Step-by-step • Tracking Metrics process • Best practices from – Internal vs. service department subletting 20 groups Wrap up the day with an interactive Q & A session with a panel of top dealers in Texas that will share how these practices are being implemented at their dealerships and will walk you through their process of getting vehicles from the auction to the frontline.

$499 Non-members

Monday, April 4, 2022 Arlington, Texas

Sponsored by:

Crowne Plaza Arlington 700 Avenue H East | Arlington, TX 76011 817.394.5000

FREE Pre-Owned Program

To register visit

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Txiada.org or by phone at 512.244.6060.

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23 LOCATIONS

JOIN US IN LANE OR ONLINE FOR YOUR SPRING INVENTORY Atlanta, GA

Chicago, IL

Interstate 94, MI

Pittsburgh, PA

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Dallas, TX

Jacksonville, FL

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Detroit Toledo, OH

Kansas City, MO

Tulsa, OK

Birmingham, AL

Greenville, SC

Lancaster, PA

Virginia Beach, VA

Boston, MA

Harrisburg, PA

North Houston, TX

West Michigan, MI

Bowling Green, KY

Houston, TX

Pensacola, FL

4

Austin

TUESDAYS & THURSDAYS AT 1PM

LOCATIONS IN TEXAS

Dallas

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

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

THURSDAYS AT 1:30PM

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

Auction Credit is located within each of our Texas facilities for all of your auction financing needs. www.auctioncredit.com

North Houston

TUESDAYS AT 1PM

1440 FM 3083 Conroe, Texas 77301 Phone: 936.441.2882

dealer spotlight Steve Babinsky

Midtown Motor Company, San Antonio, TX

Texas Dealer: Are you a seller finance or retail

dealer?

Steve Babinsky: We are a BHPH lot, and our

dealership is structured to reward our customers and help them establish or re-establish credit. We have trained account specialists to help our customers with their finance and transportation needs. We also work to ensure they have the resources to make timely payments and organize their personal budgets. Our dealership believes our customers are a part of our family, so we also give them resources for personal, family, or medical issues they might have when we can. We offer free coffee, water, television, and even a kids’ room at the dealership. Our customers are our number one priority, and we take their needs seriously. All of our vehicles come with an 18-month, 18,000-mile warranty. We even call our customers on their birthdays and on the anniversaries of when they purchased a vehicle with us.

TD: How long have you been a car dealer and how did

you get into the business?

SB: I have been a dealer since 1992, and I transitioned into the BHPH space in the year 2000. I got into the business slowly, primarily as a cash business.

I started selling cars one at a time for cash. These days, our niche is that we are dedicated to helping the community with finance and transportation needs. Back when I was selling cars for cash, I was turning so many people away who needed financing that I felt the need to transition to the finance space and I’ve been doing that for over two decades.

The dealership is open Tuesday through Saturday. We used to be open six days a week, but we’ve been closed on Mondays ever since my daughter was an infant.

I also felt that being closed on Sunday and Monday benefitted the staff. I value my Midtown team and consider them family. It’s important for them to have March 2022

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two days off in a row and to have Mondays off to take care of personal business. We finished the construction of a brand-new office building in 2021, and it’s brought a whole new outlook for the team, our customers, and the environment around the dealership.

TD: What is the most difficult decision you have ever made in the business?

SB: There were periods where I had offers from people who wanted to buy all or a portion of my accounts receivable. I spent a lot of time weighing the benefits and disadvantages. Ultimately, I never sold these accounts, and I’m glad I didn’t. My philosophy has always revolved around taking a mature approach to growth and never selling out for a quick buck. It’s 17

the same thing with getting a loan to grow the business.

There were times when I wasn’t growing, and I wouldn’t even take a personal paycheck. It can be incredibly difficult to go through those situations, stressing to make sure everyone on staff makes a paycheck. It takes a lot of cash to fund a BHPH business.

TD: What is the biggest challenge your dealership has

faced?

SB: In the beginning growing phase of the business, there were times when being a dealer proved to be really challenging. It’s only been in the last 3-4 years where we’ve been selling enough cars that we’ve been able to catch up with all of the cars that are paid off and the repossessions and replacing them with sales.

Our accounts have stayed level recently, but there have been times where growing the dealership has been a difficult process. There have been a lot of growing pains, especially because my focus has always been on organic growth.

TD: How long have you been a TIADA member and what do you think are the primary benefits of the membership for you and your dealership?

SB: I have been a TIADA member since 1994, and I can’t say enough about the services they offer. The association is an incredible resource for education, referrals, and compliance consultation. They offer wise counsel and I feel much safer knowing I have TIADA as a safety net for my business. I’ve also been involved in 20 groups for over 20 years. I believe wholeheartedly in the value of education and being part of a community, which is why I think the conference TIADA hosts every year is a great place to get new ideas and interact with industry leaders so I can learn as much as I can to keep growing.

TD: What are your general thoughts on the auto industry right now?

SB: As times change, we need to discuss emerging technologies and software, challenges and opportunities in the market, and customer service and vehicle pricing best practices. I’m a strong believer in education; that’s just part of my philosophy. I believe we have a strong community in Texas for independent automobile dealers, and I believe it’s important for us to work together. I try to help as many other dealers as I can and pay forward all that I’ve learned about the business side of things.

TD: What are your thoughts on digital advertising?

SB: We are as interactive as possible on social

media and interact regularly with our customers.

Digital advertising is the best way to reach customers today. We don’t take cash payments, but years ago we relied mostly on referrals directly from the in-person interactions of people bringing in their family members 18

or friends to make payments in person. We’ve done radio and television ads in different seasons. Now, as we have implemented different marketing campaigns and measured them, digital advertising has the biggest return on investment. Everyone seems to have a smartphone or access to one, so we market on social media.

TD: What is the most memorable vehicle you have sold (or transaction you have made)?

SB: When I started out as a dealer, I used to buy the kinds of cars I liked and would sell those. I realized over time what I liked wasn’t what everyone else liked, or really wasn’t practical. Many customers are looking for minivans and crossovers. When I first started dealing in the early 90s, I went through phases where I was interested in cars like the Camaros Z28. I had fun with those cars and wanted to buy and sell them. I have always enjoyed buying cars and getting creative with them. I’ve always enjoyed rebuilding and refurbishing them; the reconditioning process is fun for me.

TD: What do you like to do in your spare time?

SB: Family is one of the most important things to

me. I have a wife and an 18-year-old daughter, so I spend as much time with them as I can. One of my favorite activities is traveling, and I really enjoy our 20 group vacations. I also enjoy biking, hiking, and going to the gym. At Midtown Motor Company, we really are a family. We celebrate the team’s birthdays and anniversaries and enjoy social events outside of work. I also try as hard as I can to give back to my community.

It means a lot to me to be able to support individuals and charities, especially with an educational theme.

Knowledge is power.

TD: If you had one piece of advice for a dealer getting into the business today, what would it be?

SB: It is essential to have a well-thought-out business plan and a group of professional advisors to lead and guide that plan. Every aspect of your business benefits from having a solid team of advisors. That includes everything from the business concept, day-to-day operations, funding, business model, team, location, projections, everything. Make sure you have a plan for education and training, real estate, and marketing. If you fail to plan, you plan to fail.

I am also happy to help my fellow independent dealers. Please feel free to call at any time: 210-436-8242.

Want to share your story in an upcoming issue of Texas Dealer?

info@txiada.org #TXDealerSpotlight T e x a s

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feature

Awards and Scholarships Compiled by TIADA staff

The Rundown from TIADA Quality Dealer of the Year Award

The Texas Quality Dealer of the Year designation is the highest honor awarded to a TIADA member each year. The association will recognize our state Quality Dealer at the conference in July. The candidates for this award should demonstrate exceptional business ethics, professionalism, service to TIADA, and all-around good citizenship. The TIADA winner will be eligible for the National Quality Dealer Award, which will be presented at the NIADA Convention next year. The nomination deadline for 2022 is April 22nd.

Independent Award

The Independent Award is given to an individual outside of the industry (i.e. politicians, media members, non-industry supporters) who have gone above and beyond in their support of the industry and shown a truly independent spirit.

NIADA Foundation Scholarships

The NIADA Foundation promotes the academic growth of youth throughout the United States and awards scholarships annually in June at the NIADA convention.

The competition for all students is judged by Northwood University, which narrows down the field of competitors to four candidates representing each of NIADA’s four regions for the regional scholarship and selects the National scholarship recipient. The application is available at niada.com and must be postmarked no later than March 12th.

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Marvin Norwood Scholarship

In 2015, our academic scholarship was formally renamed the Marvin Norwood Scholarship, in honor of Hall of Fame inductee Marvin Norwood from Abilene Auto Sales. Marvin, who passed away in 2013, was an avid supporter of the scholarship program. $1,000 in financial assistance will be awarded to a deserving applicant who is entering or currently enrolled in an accredited college or a trade school. The application and required documents must be received by May 10th.

Nomination Information

Nominations for these awards can be done online.

Visit www.txiada.org for more information and to submit your nomination. There you can also find the application for the Marvin Norwood Scholarship (also see page 7).

Go ahead, nominate someone today!

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on the cover

by Stephen Pallas

TIADA Director of Marketing and Communications

Community Involvement

and

Your Dealership

C

ause marketing refers to a set of practices businesses can implement to benefit the causes and communities that align with their values and beliefs. It can mean contributing time or resources to a charitable cause, setting up a donations program, or otherwise positively engaging in community

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involvement. People’s shopping habits have changed in recent years. More and more, consumers don’t just want the best products and services for the best prices, they also want to know that the companies they purchase from share their values.

According to a 2019 research study conducted by Edelman, a leading

global communications firm, 81% of consumers consider trusting the brand to do what’s right a “deal breaker” or “deciding factor” in making a purchase. 72% percent of consumers will make buying decisions based on whether the company’s values align with theirs.

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Vicki Davis — A-OK Auto Sales (Porter) Vicki is involved in several charities. She gives away over 300 backpacks each year to elementary school children in East Montgomery County.

Her business gives away Christmas presents every year, a dinner giveaway for deserving parents on Mother’s Day and Father’s Day, and they also donate food and toys to a local women’s shelter.

Vicki also donates to the Susan G. Komen Foundation, whose mission is to prevent and cure breast cancer. “actively support or speak out on an issue that is important” to them.

Cause marketing is one of the best ways to become involved in issues that are important to your customer base, to demonstrate the alliance of your values with theirs, and to build trust with current and potential customers.

In other words, cause marketing is about more than just doing good.

It’s good business.

The Benefits of Cause Marketing

Dealers who implement a cause marketing plan into their strategy benefit their business and the issues about which they care. Believe it or not, customers today are more likely to purchase a vehicle from a dealer who is involved with a good cause, especially if that cause is aligned with their own values. Before discussing specific opportunities, it might be worthwhile to consider the benefits of cause marketing.

There are at least three benefits to consider:

1

Cause marketing increases sales. Porter

Novelli is a global public relations firm. In July of 2020, they conducted a survey of 150 business executives in the United States. The survey revealed several important changes in the way businesses are thinking about leading with purpose. 89% of executives believe leading with purpose gives

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companies a competitive advantage, and 85% believe it drives profit.

And consumers feel the same way. Rebecca Wetterman conducted a consumer survey in 2018. She found that “consumers are willing to pay 6 percent more for a product from a company that contributes to its community.” So, not only are potential customers more likely to purchase a vehicle from purposedriven dealerships, they will also spend more money at those dealerships than at a competitor’s business.

2

Cause marketing increases brand loyalty.

An independent dealership’s longterm reputation can be difficult to maintain. One of the clearest ways to achieve higher brand loyalty is by incorporating some kind of purpose into your practices. In Novelli’s survey, over 90% of executives see “reputational advantages” and “increased customer loyalty” directly related to

businesses involving themselves in a good cause. It is a powerful way to tell your customers that you share their values and are dedicated to your shared communities. Several studies also indicate that cause marketing leads to repeat business and referrals.

3

Cause marketing improves company culture. Novelli conducted another

survey in the summer of 2020.

There were over 1,000 respondents, all of whom were full-time employees in the United States. According to the survey, 93% of workers believe “companies should lead with Purpose,” and 88% believe companies must make some positive impact on society. Just as consumers want to purchase vehicles from socially responsible dealerships, employees want more than ever to work for companies that share their values and make a positive impact on the world. In fact, there is a financial benefit to implementing a cause marketing plan. 60% of Novelli’s survey respondents said they would take a pay cut to work for a purpose-driven company.

Types and Examples of Cause Marketing

There is no shortage of cause marketing opportunities for independent dealers across Texas.

Any of these can help to support a strategy to raise your brand’s

Greg Phea — Austin Rising Fast Motor Cars (Austin) Greg has volunteered at school fundraisers at Naumann Elementary, Cedar Park Middle School, the Austin International School. He has received the Boys and Girls Club of America Lifetime Achievement Award. He also hosts a Halloween safe-house event for Oakwood Glen neighborhood children and School for the Deaf, and he contributes to Operation Blue Santa, which provides thousands of gifts to families in need in Austin, feeding the homeless, and providing backpacks and school supplies for children in need.

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footprint in your community, increase sales and customer loyalty, and boost company culture. No matter how you involve yourself in a cause of purpose, make sure it aligns with your own values. In other words, be deliberate in your choice, especially because cause marketing involves a long-term plan.

You also want to ensure not to stretch yourself too thin in terms of time or financial resources. Here are a few types and examples of cause marketing activities:

1

Volunteer at local nonprofit organizations… and bring your staff along.

Organizing a volunteer day for your staff can be a fun way to boost employee morale and lead with purpose.

There are many initiatives across Texas that large and small dealerships can become involved in. You can even involve your customers by offering coupons or discounts for getting involved in your volunteer efforts.

One of the most famous examples of ways you can volunteer your time is Habitat for Humanity. According to their organization, “9 million Texans do not have access to adequate shelter.” There are dozens of Habitat affiliates in Texas. You can visit https://www.habitat.org/volunteer/group-opportunities/businesspartners to find out how your dealership can get involved.

2

Sponsor an educational program or scholarship.

You might have to do some research to find specific schools in need of sponsors or volunteers. There are many students in need across Texas and there are tons of opportunities to support educational programs in your local community. You can, for example, become a booster or volunteer for a local high school club or sports team.

One potential statewide organization you could support is the Texas Technology Student

22

Paul Scott — Fiesta Motors (Lubbock) Paul is a founding member of Backyard Mission, a local nonprofit that provides home improvements to local needy citizens. Backyard Mission’s statement of purpose is clear and simple: they repair homes and restore hope.

Through local mission work, Backyard Mission provides free home repairs for low-income and elderly people in Lubbock.

Association. Texas TSA creates opportunities for students in Science, Technology, Engineering, and Mathematics (STEM). If you think you might be interested in supporting STEM students in Texas, you can visit https://www.texastsa. org/sponsorship/.

3

Use your dealership to collect charitable donations. You might have few

resources to volunteer time or money to volunteer opportunities or sponsorships. If so, you can still get involved by using your business to collect donations for a local charity. More than likely, your community has a local charity that accepts donations for clothes, toys, or food. Ask around or do a little independent research to find out who accepts donations and whether you can use your dealership as a drop-off location.

Goodwill has locations throughout Texas. One example is Goodwill Central Texas, which has a Donation Acquisition Program, where businesses can schedule recurring inventory donations.

Goodwill Central Texas (as do most other locations in the state) accepts all kinds of corporate partnerships, which you can view at https://www. goodwillcentraltexas.org/donate/ corporate-partnerships.

You can find a complete, searchable list of nonprofit organizations and charities here: https://greatnonprofits.org/state/ Texas.

The Marketing Side of Cause Marketing

As with all marketing plans, dealers should create a long-term strategy for cause marketing. One donation or volunteer effort simply won’t generate the kinds of brand loyalty and trust businesses need to stay credible. Employees and customers need to know dealers are in it for the long haul.

In addition to putting in the effort to contribute to a worthy cause, it is imperative for dealers to let the public know they are leading with purpose. If you already have a newsletter or blog, make sure to update your readers about your cause marketing efforts.

Incorporate pictures, videos, and written posts into your social media strategy. Many businesses also dedicate a landing page on their website to encourage their customers to participate and to showcase the causes in which they participate.

One final important note: in being authentic when implementing a cause marketing program, avoid focusing your messaging on sales or promotion.

Customers demand that their businesses are honest in leading with purpose and that those businesses genuinely care about the causes they champion.

Your dealership really can make a difference, and you don’t have to break the bank or spend countless hours to lead with purpose and demonstrate your values.

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Yes, I would like to help with TIADA’s grassroots effort! ______________________________________________________________________________________

Please list me as a sustaining donor. I would like to support my industry by making a monthly credit card donation of $______________ Add me to the KEY-PERSON list! I know (Name of Legislator) _______________________________________________ as a ____ Acquaintance

____ Personal Friend

____ Professional Contact

I would like to attend political fundraisers in my area I would like to support my industry by pledging a one-time donation of ___$1,000

___$500

___$250

___$100

Other $________

______________________________________________________________________________________

____ Personal Check Payable to INDEPAC

_____Personal Credit Card

Name_______________________________________________________________________________ Company ____________________________________________________________________________ Home Address________________________________________________________________________ Email _______________________________________________________________________________

** Personal Check or Personal Credit Card only. Corporate contributions are prohibited by state law.

Contributions are not tax deductible as charitable contributions for federal income tax purposes. ** Charge my Credit Card V MC D AM __________________________________________________ Exp: _____/_____ CVV: _____ Name on Card: ____________________________________________________________________________ Card Billing Address (if different):

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Or donate online at www.txiada.org >> Resources >> Advocacy >> Political Action Committee

______________________________________________________________________________________

c/o TIADA 9951 Anderson Mill Rd

Referred by:

Suite 101, Austin Texas 78750

PHONE 512.244.6060 FAX 512.244.6218 EMAIL accounting@txiada.org

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The best dealers in Texas, the best education anywhere.

“Thank you, TIADA for the biggest attendee conference yet! Was unforgettable. We truly appreciate all you do. Best state association ever!” erika blankenship ,

texas auto center

24

–

austin

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March 2022

“A great way to interact with your peers, learn from them, learn from the industry experts and re-energize. I will not miss one.” chris donnelly , your car store conroe

July 24-26, 2022

“As a first time attendee all I can say is that I’ve been greatly inspired to pursue this business, Seeing how the industry changes and adapts to the times is a good sign of ever growing opportunities.” jorge tobias ,

mcallen auto sales , llc

-

mcallen

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25

Thank You

TO

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regulation matters

TIADA Successfully Defends the Independent Automobile Industry in Texas

M

any of us learned how a bill becomes a law from Schoolhouse Rock in elementary school.

The short cartoon segment features a bill that becomes a law, including explaining the process of going through Congress and how it can be vetoed. Ironically, the bill in the segment is a law that school buses must stop at railroad crossings, and no such bill has ever been approved by Congress, yet as I suspect you already know, school buses are required to stop at railroad crossings. This is because a different law was passed that allowed a federal agency to create a rule to require buses to stop, specifically 49 CFR §392.10. In this edition of Regulation Matters, I will walk you through two bills that TIADA has been working on to give you a more complete version of the law-making process.

To many, TIADA’s efforts at the Capitol means TIADA’s work to make sure legislators make informed decisions when voting on laws related to the auto industry. On a side note, if you don’t already donate to INDEPAC, please consider donating today to help those efforts. A donation form can be found on page 23.

However, TIADA’s efforts to shape laws and regulations extend far beyond the legislature because agency-issued rules have the same effects as a law. TIADA has been working rules for two recently passed bills. The first one, SB 876, eliminates the VTR-136 starting March 1, 2022.

Therefore, as of March 1, you can throw away any unused forms and stop having customers sign a VTR-136.

How great is it that there is one fewer form for a customer to sign, especially since one of the top complaints of most customers is how long it takes to do all the paperwork? The next bill I will discuss is HB 3927, which was passed to address fraudulent temporary tags.

SB 876

As of March 1, 2022, dealers are no longer required to use a VTR-136. The work to eliminate the VTR-136 started long before the 2021 Legislative Session. When work first started on eliminating the VTR-136 is hard to pinpoint. Still, as early as the 2013 Legislative Session, TIADA supported a bill (House Bill 2947-2013) amending Sec. 501.0234 of the Texas Transportation Code by striking the provisions which required a dealer to make the VTR-136 form available to every vehicle buyer. When March 2022

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Earl Cooke

TIADA DIRECTOR OF COMPLIANCE AND BUSINESS DEVELOPMENT

that bill did not pass, TIADA and other stakeholders continued to work at eliminating the VTR-136. Finally, after many years of numerous stakeholders working to eliminate the VTR-136, Senator Hancock introduced SB 876 on March 1, 2021. Initially, SB 876 was designed to only eliminate the VTR-136 by allowing dealers to transfer “in any county in which the county assessor-collector is willing to accept the application.” But, during the Senate Transportation Committee meeting, a committee substitute was passed that allowed citizens this same right and ensured revenue related to the transaction was retained by the vehicle owner’s county of residence. Later other changes were made to give TxDMV more time to implement the law, and on September 14, 2021, the Governor signed the bill. While the Legislatures job was finished, TIADA continued to follow SB 876, and I will discuss that process some more while talking about HB 3927.

For a summary of how SB 876 changes things for dealers, please see the chart on the following page.

HB 3927

Along with SB 876, TIADA has been watching HB 3927. HB 3927 was signed into law on June 1, 2021, to deal with fraudulent temporary tags by allowing TxDMV to “establish the maximum number of temporary tags that a dealer or converter may obtain in a calendar year.” TIADA ensured dealers’ voices were heard throughout the process. After HB 3927 was introduced, TIADA reached out to legislature members to express our concerns about possible negative impacts on dealers and express our support for eliminating temporary tag abuse. After it passed, TIADA continued to work on HB 3927, starting with numerous members participating in hearings before rules were issued.

After those hearings, TxDMV issued proposed rules.

TIADA made 11 comments to express our concerns with the proposed rules in response to the proposed rules. To understand the process, I will discuss three of TIADA’s comments and TxDMV’s response to those comments. Those comments are: 33

P rovisions should be made to handle changes in business practices, i.e., switching from agent-specific tags to vehicle-specific tags; D ealers receiving an allocation of temporary tags must be able to request additional tags; and Th e proposed rules should follow the objective of HB 3927 by focusing on the grossly excessive issuance of temporary tags.

Changes in Business Practices

The first comment I would like to discuss is TIADA’s comment requesting a process to increase the allotment of dealer temporary tags when a dealer switches from agent-specific tags to vehicle-specific tags. Specifically, TIADA stated as follows: “Provisions should be made to handle changes in business practices. Most dealers use agent-specific tags, but during the COVID pandemic, some dealers switched to vehicle-specific tags to send customers on test drives without a salesperson. Also, many dealers facing staff shortages are considering not having their salespeople go on tests drives and may switch to vehiclespecific tags. The number of tags issued per year is greatly increased when a dealer uses vehicle-specific tags. This limit would hinder dealers currently using agent-specific tags to switch to vehicle-specific tags. Therefore, TIADA recommends a process to increase the allotment of temporary tags when a dealer switches from agent-specific tags to vehicle-specific tags.”

absolute limit on independent dealers receiving a license after the commencement of a calendar year to 300 temporary tags. §215.152(f) states “. . . The allocations shall be as determined by the department in granting the license, but not more than [emphasis added].” TIADA believes situations may arise that require more than 300 temporary tags. Therefore, TIADA suggests inserting the word “initial” before the word “allocations” and after the word “The,” thereby making it clear that a dealer can obtain more temporary tags.

It is unclear if §215.152(f) applies to §215.152(h). §215.152(h) should follow the format of §215.152(g) by clearly stating subsection (f) does not apply. This avoids any confusion created by subsection (f), which provides that a non-franchised dealer shall not be allowed more than 300 temporary tags.

TxDMV responded to TIADA’s comments as follows: “The department agrees with the comments and has made changes to §§215.152(f), 215.152(g), and

TxDMV acknowledged TIADA’s comment and responded as follows: “The department recognizes the concern but has made no change in the text.

Allocation of dealer tags should adjust in future years based on historical use; however, current year allocations can also be considered in requests for additional tags, or at time of licensing.”

Requesting Additional Tags

The next comment I would like to review is TIADA’s comment relating to the allotment of tags for new independent dealers.

TIADA comment as follows: §215.152 appears to set an March 2022

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215.152(h). The changes do not add new requirements or costs or affect persons not on notice of the proposal.

Section 215.152(f) is changed to add the word “initial” before the word “allocations” and after the word “The” in the second sentence. The statement clarifies that a new dealer is not prohibited from requesting additional temporary tags under §215.152(i). . .As such, a new dealer or converter may request additional tags over the minimum number, which is consistent with Transportation Code §503.0632(c), which authorizes the dealer or converter to request additional tags.”

department declines to set a threshold number or percentage because setting a threshold could create a safe harbor for fraudulent activity. Further, denial of access will be based on a department determination. The department will investigate whether the license holder, or sub-user of the license holder, has violated the rule and statute. The investigation will vary depending on the activity involved, if the activity is ongoing, the response of the license holder to department inquiries, and information the license holder has provided the department.

The Proposed Rules Should Focus On Grossly Excessive Issuance

After TxDMV issued their responses to our comments, TIADA evaluated the significance of each response, the likelihood that we could obtain a better outcome, and the importance of reiterating our opinion. Weighing these factors, TIADA took different approaches in proceeding with advocating for our positions. First, for instances where TxDMV made significant changes based on our comments, we expressed our gratitude to TxDMV for doing so. In other instances where our comments did not lead to changes in the rule, we evaluated whether to show opposition to the lack of changes during the TxDMV board meeting. We decided not to voice opposition to business practices changes in the above examples. We felt other mechanisms could deal with a situation where a dealer changes the types of tags it uses. For requesting additional tags, we thanked TxDMV for consideration of our comments.

The final comment I want to go over is TIADA’s comment relating to the rules focusing on all temporary tags being issued. Specifically, TIADA commented as follows: The proposed rules should follow the objective of HB 3927 by focusing on the grossly excessive issuance of temporary tags. HB 3927 was passed to deal with criminals issuing grossly excessive numbers of temporary tags without any sales. §215.505(a)(1) provides that a dealer is misusing the temporary tag database if it obtains “an excessive number of temporary tags relative to dealer sales.” What is “an excessive number of temporary tags relative to dealer sales”? Is just one tag issued by a rogue employee enough to take away a dealer’s access to the temporary tag system? This is especially concerning since access can be denied before a hearing. Therefore, TIADA recommends the following instead of “an excessive number of temporary tags relative to dealer sales”: “a grossly excessive number of temporary tags relative to dealer sales” TxDMV acknowledged the comment and responded as follows: “Two commenters raise concerns that the section provides no guidepost with respect to what is an excessive number of temporary tags relative to a dealer’s sales.

The commenters ask: (1) is the benchmark twice the number of sales or ten percent; (2) is the amount of one tag or an amount that is “grossly” excessive; and (3) what is an “excessive” number of buyer’s temporary tags versus excessive agent’s temporary tags versus excessive vehicle-specific temporary tags?

Agency Response: The department appreciates the comments and considers that HB 3927 is meant to aid law enforcement and the department to work together in stopping the fraud without being onerous to legitimate dealers. The 36

TIADA Response to TxDMV

TIADA Testimony

Finally, TIADA decided it best to testify in opposition to the language defining fraudulent tags despite recognizing that the board was unlikely to change TxDMV’s recommendation and that TIADA had secured numerous significant changes to the rule. The concern we expressed to the board was that one tag should not be considered excessive, and we felt the law was never passed to deal with legitimate users who may accidentally issue an additional tag and that TxDMV may mistake a backout such as a vehicle that financing falls through on as an unauthorized issuance of a temporary tag. To back our position, we pointed to another section in the board packet in which TxDMV stated a dealer with a rescinded sale could rebut the presumption that a tag was issued and language that a dealer could lose access before they had a chance to rebut that presumption. The board responded that TxDMV would never cut off tag access over one tag unless there had been multiple violations, and they needed to keep the enforcement power for those instances. Despite not securing every change we advocated for, TIADA believes the rules will minimally impact most dealers and help address some of the fraudulent tag abuse.

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Auto Dealer Solutions

DEALER SOFTWARE , WEBSITES & MARKETING

feature

Skip Tracing Meets LPR

by Alex “SkipGuru” Price

Director of Training and Development at LocateSmarter

A

llan Pinkerton formed his national detective agency in 1850, and during the 1870s his agency’s pursuit of Frank and Jesse James became legendary. Pinkerton’s agents may have been the first to truly understand the value of studying human behavior while tracking the James gang. I find it intriguing that some of the techniques that they originated are still in use today.

After a robbery, Pinkerton innovated the process of tracking serial numbers on money, which helped them detect getaway routes and eventually locate the hideout, “The Hole in The Wall.” As I spend so much time

Statistically, there are certain things that all of us do compulsively. It is just part of what and who we are.

We invariably use the same two ATM Machines, one close to work for some quick cash for lunch, one close to home for weekend activities. We use the same two grocery stores, one close to work to grab a quick item on the way home, and one for weekly or bi-weekly shopping. We patronize the same three to eight restaurants week-in and week out, rotating among them depending on what we crave. What is important here is that all these locations are usually within a one-mile radius of our home or our employment. Geographics come into

studying skip-tracing, human nature, human behavior, interviewing skills, and related aspects of this industry, I cannot help but wonder about these skip-tracers from our past. For our purposes, skip tracing is simply the process of tracking down people, like debtors, who are difficult to find.

Pinkerton relied on natural instincts, cunning, and a keen understanding of human nature to innovate many of the tools and techniques that propelled his agency to the global empire that still operates today in over 100 countries. Pinkerton’s agents gathered every bit of information they could on the James brothers, Butch Cassidy’s Wild Bunch, and the Younger Gang, focusing on every facet of their lives, down to their likes and dislikes.

play in some rural areas but normally a mile as humans are both creatures of habit and comfort. We naturally gravitate to what we know and like!

If you take a hard look at your favorite haunts, your go-to stores, clubs and other lifestyle events that you have frequented over the past month, there is a discernable, undeniable pattern. The old saying ‘birds of a feather flock together’ applies to the fact that we end up at the same locations with others who share our interests. In the past 20 years, there have been four inventions that changed skip-tracing forever: 1. MasterQueue: Thank you, John Lewis.

2. RDN & DRN: Thank you, Todd Hodnett.

3. Public record data bases: Thank you, Hank Asher.

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The fourth invention, and the biggest game-changer in my opinion, was license plate recognition (LPR) as it is now used across the globe crossing over to every industry that has a need to locate a human.

LPR systems uses cameras to automatically capture pictures of license plates and store the information, such as vehicle location and the date and time of the photo capture.

The only real problem I see with this technology is too many companies use it as their primary solution and it is mainly used as a skip tool to avoid a charge-off.

The auto lending industry will

be my focus for this writing. They have forgotten the golden rule of collections — Early Recognition is Everything. Live LPR hits get approximately a 25% hit rate; that means 75% of all skips need to be worked the good old fashion way and it makes the historical data more valuable than the “live alerts” in my opinion, but they are only leads and they need to be verified with other data sets and nothing, and I mean nothing, beats the human eyes or mind! Historical data is just that and just because there is a picture of the automobile at the location does not mean it is there

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now or will ever be there again. Let us combine Human Behavior with LPR in-order to give your efforts a major lift. We are going to use public records, human behavior and LPR. Unlike the Pinkertons, we do not have to track serial numbers from town to town on horseback.

Example: a two-month hold LPR hit at a Walmart, that you failed to use, I know you’re thinking, “Well, that’s two months old. No way my car is still there,” and you dismissed it. Would the Pinkertons have given up that easily? No! Go to Google maps, and do a one-mile radius around the area and see what is in the geographic area. If it is a bunch of apartments, call your local chamber of commerce to determine which ones would fit your subject’s economic need, remembering that they have dropped down the economic ladder since the time of the loan, or they would not be skips or look for relatives or known associates as they could have fallen further down the economic ladder and are now couch surfing from place to place with those locations drilled down on, you can dial for dollars or put boots on the ground.

If that one-off location is in a commercial or industrial location, go back to your credit application and look at their employment history. If they were a car salesman at the time of the loan, they are not a doctor now. Look in the mile radius for a business that would have a need for that vocation, and once again dial for dollars or put boots on the ground. This is when human behavior meets LPR and makes your job much easier. The Pinkertons of the 1870s couldn’t have guessed at the technology that would come, but they would have known to fully utilize it. I would hope that you will look at the one-off hits a little closer and make our predecessors proud and remember there are no absolutes in this high-stakes game of hide-and-seek, so use all your resources!

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feature

5 Successful SEO Secrets to Help Your Dealership

by Usman Haq

Vice President at AutoJini

T

here’s no magic recipe for how your dealership should be handling its search engine optimization (SEO). Essentially, SEO refers to the things you can do to become easier to find on Google, Bing, and other popular search engines. It all depends on what your goals for your dealership are. You obviously want to sell your inventory and meet sales goals, but do you also want to drive traffic to your site before they come to your lot? Do you want to have more people subscribe to your emails? Before you go forward with your dealership SEO plan, you want to make sure you layout your exact goals and how you plan to keep track of everything.

Should My Dealership Be Using SEO?

Absolutely! When you create a well-rounded search engine optimization program for your dealership, you’re likely to see incredible results. There’s no reason not to start working on your SEO plan, from improved site traffic to higher conversion rates. Whether your transactions are typically done online or in person, people are most likely looking at your website before even considering making a purchase. Not only should you have a responsive dealership website that works across all platforms, but you need to make sure you have an established place on the Internet as well. From the Google search results page to social media platforms, you need to place your dealership where your customers will see it.

1

Ubersuggest

Neil Patel has created a great SEO tool called Ubersuggest that can help you analyze your website’s “health,” generate keywords and content, and determine how your site compares to your competitors. The tool is free and easy to use; you just put in your website URL, and you have access to tons of data about your site. This tool is especially useful if you have a blog on your dealership’s site because you can find out exactly what keywords you should be using to generate more traffic. Additionally, the SEO analyzer will tell you how “healthy” your dealership website is. It gives you data that shows your organic monthly traffic, backlinks, and, most importantly, any errors that may negatively affect your dealership’s website. Although no website is perfect, and you’ll probably have a few mistakes to fix, as

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long as none of your pages are completely broken, and you have relatively fast loading times, you should be in good shape.

2

Blogging is Your Best Friend

3

Google My Business

If your dealership doesn’t already have a blog, now is the time to create one. By creating a blog, you create sharable content that your viewers will spread to their friends and family. After reading your blog they will likely look around your site and see what else you have to offer. If you’ve already got a blog set up and running on your dealership website, you might want to keep a few things in mind for future blogs. Don’t be afraid to use emotion or specific descriptive words in your titles.

There is typically an increase of almost 14% in clickthrough rates when utilizing these words. Studies have shown that the most highly trafficked blogs typically have 76 keywords per post. This doesn’t mean that you should be trying to use as many keywords as you can or that you should be using the exact keywords for every single post. You need to be strategic about the kind of keywords you’re using and what you think will drive the most traffic to your dealership website. Finally, you’re likely to see more success when you optimize your title to fit these keywords. You’ll have even more success if you use long-tail keywords. Do your research because every industry is different.

This one should not be a secret if you already have an established dealership. With Google My Business, you’ll want to have the name of your dealership, address, and phone number in your listing. Those are the basics. What many people forget about is having a category for their business. The category will ensure your dealership shows up when people are searching for car dealerships in their area.

Additionally, there should be some photos available to see on your listing. I always think it’s helpful to have photos because the customer will know exactly what they are looking for when they eventually come to your dealership. Arguably, the most important parts of this section are the reviews and questions and answers. You obviously cannot really control if you get bad reviews, 41

Local Chapters CORPUS CHRISTI G.R. Moore The Car Shack (dates announced at

www.txiada.org)

EL PASO Cesar Stark S & S Motors Meeting – 3rd Friday (Monthly)

FORT WORTH Jerry Smith H J Smith Automobiles (dates announced at

www.txiada.org)

HOUSTON April Hanson Coast to Coast Motors Meeting – 2nd Tuesday (Monthly)

SAN ANTONIO Jose Engler Irving Motors Corp (dates announced at

www.txiada.org)

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but you control how you react to them. Suppose someone leaves a bad review for your dealership. In that case, we recommend leaving a comment on the review apologizing for their unpleasant experience and offering some kind of olive branch in return. You could even give your contact information and discuss with the reviewer to really know what went wrong and what you can do in the future to ensure this does not happen again. You should also be checking this periodically to see if anyone is asking questions about your dealership before they come to your lot. It’s imperative to stay on top of this because you don’t want someone else answering a question for you, and they end up spreading misinformation.

4

Focus on Your Customers

So many businesses are worried about the Google algorithm and pleasing the all-mighty site crawlers.

You know your customers better than anyone else. If you just take the time to do your keyword research and maybe even see what your competitors are doing to drive traffic to them, you can figure out what works best for you. Track the trending keywords through Google over time and utilize that to attract your leads. It’s important to remember that there is no one size fits all approach to search engine optimization in the automotive industry. There are so many different types of makes and models, and everyone wants something a little different. Please do your research, talk to your customers, and know that it all takes time. You likely won’t start seeing results until about 30 days after implementing your search engine optimization strategies.

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Website Maintenance

Make sure you regularly check your dealership’s website for technical health errors. A lot of this is technical information, so you may want to consult with a marketing expert for assistance with your website. Some

technical errors you should be looking for are: Broken links: These can display error messages when clicked, so check every link on your website to ensure they are all working properly.

D uplicate title tags and meta descriptions: Each page on your

site should have a unique title and description, so check that you do not have any repeats throughout your pages.

P roper index directive: Verify that you have a proper index directive by having a robots.txt file in place. This will direct search engine crawlers towards the pages you want to be crawled and those they should ignore.

I nternal linking: With internal linking, you can provide users with links to extra content that are natural extensions of the page they entered your dealer site from.

R edirect chains: These can slow down your site. Make sure to clean out your old redirects to get site visitors to their destination as efficiently as possible.

A lt-image text: Provide these on your site so that all of your images have descriptive alt text for visitors using a screen reader. This will also be helpful for search engines to create image context.

X ML sitemap: Clean your sitemap and make sure your pages are not redirecting, have been indexed, and do not contain any broken links.

There are many ways to improve your search engine optimization for your dealership. With the amount of information out there about SEO and how to implement it, it can get overwhelming. We have put together a small guide for the best SEO strategy for your dealership.

Hopefully, by following these steps, you can improve your SEO and build a better business.

A version of this article first appeared at www.autojini.com.

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Does Your Dealership Have a Customer Feedback Loop?

by Bill Springer

President of DriveSure

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t seems obvious: Customers tell you what they like or don’t like. Your dealership does more or less of those things. At a basic level, that’s right. But dealerships need more intentionality when it comes to customer feedback. They need to be able to take action and show their customers they’re committed to continual improvement and listening.

That’s where customer feedback loops enter the picture.

A customer feedback loop is an approach to gathering insights on a continual basis, so your dealership can keep its finger on the pulse of your customer base and improve its overall experience. Many dealerships send surveys or have casual conversations with their customers. Customer feedback loops take these efforts to the next level to ensure you’re constantly receiving and responding to customer feedback.

As we’ll talk about later, the key point for a successful customer feedback loop is “responding.” Without meaningful action from your dealership — aka closing the loop — it fails to be a feedback loop at all.

Loyal customers relate to more referrals for your business. By providing customers with a quality experience, better value for their money, and convenient access to repairs of any kind, you’ll be well on your way to developing a rolodex of referrals. To maximize this effect, make sure your happy customers are also encouraged to leave online reviews for your dealership too.

Having a sizable collection of customer reviews out in the Internet ether to help spread the word is great.

But if you can creatively use some of those reviews to further promote your service department — that’s even better. Used in email campaigns, Facebook and Google Ads, and even on YouTube if you can get video testimonials, the “customer review ads” always receive a good response rate.

Let’s take a closer look at customer feedback loops and why your dealership should have one.

The Importance of a Customer Feedback Loop

Customer feedback loops drive loyalty and retention.

Customers want to know they have a voice at your dealership and that you’re willing to listen to them. Show them you’re all about taking action to improve their March 2022

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experience and they’ll keep coming back. They’ll also tell their friends and family to buy from your dealership.

Customer feedback loops are important to dealerships because they establish a scalable system for making customers feel heard. They go beyond merely asking for feedback; customer feedback loops end with a solution and an affirmation to the customer that their thoughts led to a positive change.

Customer feedback loops are essential because customer loyalty is essential. Their value is that simple.

The Stages of a Customer Feedback Loop Gather: Surveys are a natural starting point for

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gathering data. Using a survey platform to do this can be beneficial because they’re easy to build and share — and they sometimes offer instant analysis of the results. Gathering feedback can be done via email, dealer management systems, live chats, and even social media.

Understanding when to source customer feedback is the key at this stage.

Think about the different touchpoints where a customer is most likely to have an emotional response (good or bad) to your dealership. At what points in their visit are customers deciding to buy or not? At what points are they deciding they’ll return or not?

An example strategy for gathering data in a customer feedback loop may begin with a survey about a service visit. You set up an automation, likely using an email integration with your dealer management system, to send each service customer a satisfaction survey one hour after their visit. Once the customer completes the survey, another automated email is sent to them as a “thank you” for their time — potentially including a small dealership store credit.

While this outreach can be done manually, it’s a huge challenge to scale. Just like with requesting customer reviews, automated email campaigns are effective and easy to create.

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Analyze: Once you’ve gathered enough data to

make reasonable conclusions about your customer satisfaction, it’s time to analyze. Your dealership may also consider setting up a quarterly cadence for performing these analyses. First, break out your 43

customer feedback by category — for example, service insights vs. sales insights. Then, your dealership can review feedback in an intentional and actionable way.

Hopefully the tools you’re using have built-in analytics. Either way, you’re looking for common themes here. Are you receiving the same complaints about service wait times?

Do customers rave about the same salesperson? These are the kinds of questions you’ll ask yourself as you analyze customer feedback.

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Implement: As mentioned

earlier, this fails to be a “loop” without action from your dealership. That means implementing insights from your customer feedback — or closing the loop — through solutions. If you’ve determined a need, such as decreasing service wait times, start working towards a strategy with your team.

An important point at this stage is to communicate with your customers. Set the tone that your

dealership is dedicated to their satisfaction by letting them know a solution is in the works as a result of their feedback. Once the solution has been implemented, again make sure customers know that it was a result of their feedback.

Action and communication fuel customer feedback loops (and thus loyalty).

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Revisit: Without customer

feedback loops, old problems can quickly become new problems.

In the analyze stage, watch out for common customer complaints that have returned. Track the performance and reception of new solutions. Ask your customers in the gather stage for their thoughts on the solutions you’ve already implemented as a result of their feedback. As the name suggests, customer feedback loops depend on constant connection throughout the stages.

Closing a Customer Feedback Loop

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The benefits and stages of a customer feedback loop are all welldocumented. But as you read more about this topic, you’ll run into the idea of “closing” your customer feedback loop.

Wait, why would you want to close your customer feedback loop?

Closing the customer feedback loop simply means you’ve notified customers a change has been made to your dealership’s offerings directly based on their feedback. Going back to the main theme of customer feedback loops, you’re putting a cap on the process by telling them they were heard. You’re telling them their feedback mattered.

A version of this article first appeared at www.drivingsales.com/community/blogs on January 20, 2022. Discover more content and dealer solutions at www. drivesure.com. Bill Springer has served in the role of President of DriveSure since 2000.

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behind the wheel Goal Number One

L

ast month I discussed the new 5-year strategic plan and the supporting goals approved by the TIADA board in January. As a member-owned, member-governed organization, you need to know the direction of your association. This doesn’t mean the association can’t make changes and adjustments along the way, but this process creates a very transparent conversation between its members, its elected leaders, and its staff.

STRATEGIC PLAN:

By Year-End FY’22

I dentify the top 1,000 non-members (in sales volume).

I dentify and recruit a strategic member group (board members, past presidents, large dealerships) that can help reach out to those non-members where a relationship already exists.

A rrange one-on-one or small group meetings with a targeted group (coffee, lunch, etc.).

T rack the pre-licensing education outreach program (effort and cost compared with conversion and volume sales).

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Jeff Martin by

TIADA EXECUTIVE DIRECTOR

Over the next few months, I will share the strategic plan behind each goal.

Goal #1 — Obtain a membership representing 50% of all used vehicles sold by independent dealers in Texas.

A ppoint an Ad-Hoc committee composed of auction representatives to discuss membership recruiting ideas.

R eview the “day at the auction” program and develop a program to fit the current times and measure ROI.

By Year-End FY’23

C reate opportunities where new “target” non-members can participate and become engaged with the association, securing their renewal. (Invite to roundtables/town hall meetings, serve on committees, a special event at the conference, legislative meetings, etc.).

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H ost four town hall meetings in conjunction with local chapters where applicable. Invite targeted non-members to attend meetings.

C reate a conference scholarship or incentive program for any target non-member dealer.

I ncrease our online Professional Development offerings to create more membership value.

By Year-End FY’24

E xplore restructuring the membership model from rooftop to volume sales with a potential reduction of dues to low volume dealers.

C ontinue growing our online presence and marketing to non-members via social media outlets by focusing on the target non-members.

E valuate and continue with the town hall meeting program, expanding to other areas in the state. Host eight meetings this

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year and focus on high-target dealers in each region.

A nalyze the effectiveness of the pre-licensing education outreach program and determine whether to continue offering the New Dealer Select Program.

partnering with associate members.

By Year-End FY’26

By Year-End FY’25

E valuate and continue with the town hall meeting program, expanding to other areas in the state.

D evelop and launch an ambassador program that will include in the field dealer recruiters.

E xplore new potential membership benefits for the specific target non-members.

These could include but are not limited to in-house programs like compliance audits or white label products

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A nalyze the effectiveness of the top non-members recruiting program and determine whether to move forward with the next target non-member group.

A nalyze the effectiveness of the roundtable/town hall meeting program and adjust the number of monthly meetings and location according to reception and need.

H ire staff to grow programs as needed. Positions could include a Director of Member Services, Director of Membership, Field Representatives, and others.

Next month we will discuss supporting goal number two.

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