See page 18....
In This Issue: – Maximum Finance Charge Rates for 2016 – TxDMV’s Administrative Violation Process – The OCCC 2015 Dealer Compliance Report – Dealer Information from the Texas Comptroller
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Volume XV
2016 TIADA Board of Directors
PRESIDENT ELECT Kathrine Tolsch/CICO Auto Sales 11050 Harry Hines Blvd. Dallas, TX 75229 Office: 214.352.9282 / Fax: 214.352.8227 Email: cicoauto@verizon.net
SECRETARY Greg Zak/Dixon Motors 7902 North Freeway Houston, TX 77037 Office: 281.931.1300 Email: gzak@windstream.net TREASURER Trey Crouch/Trey Crouch’s Wheels On Credit, Inc. 636 E. Business 83 McAllen, TX 78501 Office: 956.972.0700 Email: trey@wheelsoncredit.com VICE PRESIDENT, WEST TEXAS (REGION 1) Paul Scott/Fiesta Motors – Lubbock 2599 74th Street Lubbock, TX 79423 Office: 806.765.3640 Email: pscott@gofiestamotors.com VICE PRESIDENT, FORT WORTH (REGION 2) Tommy Gregory/Abilene Used Cars Sales Inc. 497 E.S. 11th Abilene, TX 79602 Office: 325.676.8000 Email: aucsinc@sbcglobal.net VICE PRESIDENT, DALLAS (REGION 3) Wayne Meagher/M D Auto Sales 2002 W. Main Street Grand Prairie, TX 75050 Office: 972.641.9598 Email: wayne@navchiefs.com
I s s u e 12
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texasDealer
PRESIDENT Phil Lathrop/VP Auto Sales Inc. 2921 S. Garland Avenue Garland, TX 75041 Office: 972.864.1300 Email: phillipl@vpautosales.com
CHAIRMAN OF THE BOARD Brent Rhodes/Fiesta Motors 5150 Industrial Way Drive Buda, TX 78610 Office: 512.312.2201 Email: brent@fiestamotors.net
/
5 Officers’ Message
contents
by Phil Lathrop, TIADA President
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In Memoriam: Henry Finis Jenkins, Jr.
11 Legal Corner: Alternatives to Traditional PropertyDamage Insurance Offer Options to Dealers by Michael W. Dunagan
12 Upcoming Events 14 New Members 18 On The Cover: 2015 Annual Compliance Quiz 21 Dealer Information from the Texas Comptroller provided by Texas Comptroller of Public Accounts Staff
24 Education, Communication, Cooperation and Expectations in the Administrative Violation Process by Ray Willoughby
27
Dealer Inspection Report
28 Board of Directors Meeting Minutes
VICE PRESIDENT, HOUSTON (REGION 4) Juan Sabillon/Mi Tierra Auto Sales 7935 Gulf Freeway Houston, TX 77017 Office: 713.644.2446 Email: brentfordct@yahoo.com
30 Regulation Matters: Keep the Surprises Under the Tree: Run a Title Check
VICE PRESIDENT, CENTRAL TEXAS (REGION 5) Robert Beck/Stop N’Drive Motors 711 N. General McMullen Dr. San Antonio, TX 78228 Office: 210.432.1101 Email: stopdrive@texas.net
35 OCCC Regulatory Activities Report
VICE PRESIDENT, SOUTH TEXAS (REGION 6) Dan Keetch/Keetch Motors 1010 S. Staples Corpus Christi, TX 78404 Office: 361.882.3541 Email: dankeetch51@yahoo.com VICE PRESIDENT AT LARGE James Hobson/H-Town Motors 3714 Dyer Street El Paso TX 79930 Office: 915.564.9797 Email: htownmotors@sbcglobal.net VICE PRESIDENT AT LARGE Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 Office: 713.641.0980 Email: ryan.winkelmann@sbcglobal.net TIADA EXECUTIVE DIRECTOR Jeff Martin 9951 Anderson Mill Rd., Suite 101 Austin, TX 78750 Office Hours M-F 8:30am - 4:30pm 800.442.5944 • Fax 512.244.6218 jeff.martin@txiada.com
by Danny Langfield by Rudy Aguilar
40 Maximum Finance Charge Rates for 2016 by Michael W. Dunagan
43 Local Chapters
46 Behind the Wheel by Jeff Martin
What’s happening at w w w . t x i a d a . c o m ?
Membership Renewal! When you login, the welcome screen displays a reminder of your membership status. If your membership is only current through 12/31/15, click the renewal link and easily renew your membership online for 2016. The Editor of the Texas Dealer magazine is Teresa Orkun, Marketing Communications Coordinator of TIADA. To change your address for subscription and/or for other TIADA products, call the TIADA state office at 800.442.5944, 512.244.6060 or fax 512.244.6218. E-mail: info@txiada.com. New Membership/Subscriptions: If you are a member of TIADA, you may receive this magazine free of charge. Membership year runs from Jan 1 to Dec 31. Back issues are available for $20 each subject to availability. Send a check or money order, along with your name and mailing address to TEXAS DEALER, Attn: Back Issues, 9951 Anderson Mill Rd., Suite 101, Austin, TX 78750. Sorry, no billing. Notice to all members concerning services and products: TIADA was established in 1944 to develop professional standards of service and conduct for the independent auto industry. Opinions expressed herein are not necessarily those of the TIADA management, the Board of Directors or the membership. Likewise, the appearance of advertisers or their indemnifications of TIADA does not constitute endorsement of the products or services featured.
officers’ message Happy Holidays, Texas Dealers!
by Phil
Lathrop
VP Auto Sales Inc. (Garland) TIADA PRESIDENT
H
or industry. The other main contention is that a class ope your business is doing well! action is the only way justice can be served on these I had the pleasure of attending the NIADA small claims. Leadership Conference & Legislative Summit in The procedure was for the CFPB representatives to Washington D.C. October 26–29. ask questions, and we were given the opportunity to On day two, while other dealers were hall walking at respond. The questions included the Capitol, I was having a differsuch issues as the possibility of ent experience. acquiring insurance to cover leI was selected to attend a gal expenses if you were named small business advisory review in a class action; would you panel at the Consumer Financial change the way you did business Protection Bureau as a provider if you did not have an arbitraof direct auto financing. The topic tion agreement; when and why of discussion was rule making, did you start using an arbitration concerning the potential elimiagreement; and many others. nation of the use of arbitration I responded to nearly every agreements and the “class action question asked, as I do use arbiwaiver” that is typical to that tration agreements with a class agreement. action waiver. I started using arTIADA Deputy Director Danny bitration agreements after I was Langfield accompanied me as an named in a potential class action advisor, but the process didn’t alwith scores of Texas independent low him to speak as this was for dealers in 2002. business owners and not associaThe issue then was we were tion people. It was an education Phil Lathrop and Richard Cordray (CFPB) accused of charging interest on for both of us. sales tax which had not been There were 25 other busiadvanced to the state due to the deferred tax method. I ness owners or representatives on the panel. It was a knew my software extracted the sales tax from the princombination of small banks, credit unions, collection cipal balance before calculating the interest charge, but agencies, debt buyers and a pay day lender. Also in atthat didn’t matter. I was being sued. tendance were representatives from the Small Business The nightmare began when I was served. The first reAdministration. quest of the plaintiffs’ attorneys was every customer file The CFPB position is that these class action waivdating back seven years. I contacted Mike Dunagan and ers prevent consumers with small claims from receivdiscovered I wasn’t alone. Many of my dealer friends ing legal representation. The assertion is consumers were also being served and the number grew daily. don’t realize the gravity of signing away their right Mr. Dunagan wisely advised us, after seeing the scope to participate in a class action against a business
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of this suit, to hire a law firm that had the fire power to fight this threat. He remained as counsel and we retained a team at what is now the large firm of Locke Lord led by Rob Mowrey. We knew this was going to be expensive. Gary Sayre, Robert Milligan, Blake Ingram and myself formed a team and started a “call to arms” to raise money for legal defense. 250 Texas dealers were now named as defendants. Money was quickly raised. It is noteworthy to point out that Blake was already using arbitration agreements and was quickly dropped from the suit. A class action suit must first be certified as a class by the courts before it can move forward. The end result came after two years when the court denied the certification. Dealers were released from the suit one by one until it was dropped. The legal expense was $700,000. This was to prevent the class from certifying. The expense, if certified, would have been unimaginable. My input to the CFPB used the above example to defend the arbitration agreement. I explained my experience of having to spend two years, thousands of dollars, and hundreds of hours to defend a baseless accusation. I stated that I felt class action suits are a business model for attorneys to make millions while the plaintiffs get very little. I mentioned that we felt
arbitration agreements gave our customers a low cost method of resolving disputes. I pointed out that, unlike credit card agreements or mortgage loans, our agreements are a separate document. They are not buried in the fine print and are written in plain language. I tried to make the point that we are small businesses and we don’t have the resources to battle these types of suits; what can be a slap on the wrist for a large bank issuing credit cards would put us out of business. Consider this: Between 2008 and 2012, 419 class action suits were filed in federal courts. 6.8 million plaintiffs received $220 million ($32 a piece) while the law firms initiating the suits received 21% or $46 million. Wow! I can only hope my representation of BHPH dealers will be considered by the CFPB and small businesses will be able to continue to protect themselves using arbitration agreements with class action waivers. We should know the outcome early next year. Trust me; belonging to TIADA gives us a unity that is priceless as we move to protect our interests. The accompanying NIADA membership is crucial when it comes to protecting us at the federal level. First, renew your own membership! Next, spread the word and get a fellow dealer to join us. Just Get One!
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in memoriam Henry Finis Jenkins, Jr. compiled by Texas Dealer staff
I
t is with great sadness that we report the passing of TIADA past president (1975, 1983) Henry Jenkins on October 17, 2015 at the age of 81. Henry was owner of Jenkins Used Cars and had been a car dealer for 55 years in Fort Worth. He was a longtime member of TIADA. “His legacy to the independent dealer industry is the dealer bond,” said Michael Dunagan, TIADA’s General Counsel, and he added “Back then, a dealer license could be obtained instantly at the Motor Vehicle Division office for $20. Jenkins felt that something needed to be done to control the bad actors that were issuing bad drafts and selling vehicles they didn’t own. He became the major advocate for requiring a $25,000 bond as a condition of getting a dealer license. As legislative committee chairman, he organized a legislative effort to take the proposal to the legislature. His first task was convincing the TIADA board of directors to approve the initiative, which was no easy task in the face of some strong opposition. His efforts paid off when the legislature passed the bond requirement. There were many dealers
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who were unhappy about the bond, and TIADA’s membership took a hit. A lawsuit challenging the constitutionality of the bond law (because franchised dealers were exempted) and a repeal bill in the next legislative session were both defeated. Now, some 35 years later, the bond is a fact of life for most dealers.” Past President George Karlen, from Karlen Auto Company in Dallas, remembers how active Henry was in the Fort Worth association earning him the nick-name of ‘Mr. Fort Worth’. “I served with Henry on nearly every committee during the 1970’s and 1980’s. Henry took many trips to Austin to fight against bills being introduced that would not be good for the independent dealer,” Karlen added. “He was a good friend of TIADA and supported it with his time and money; he also won several Eagle Awards for his recruitment efforts. He will be greatly missed in our profession.” Henry was also a member of the Southside Optimist Club for over 50 years. He played Santa Claus to local nursing homes for 40 of those years. He also served in the National Guard for 12 years.
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S I N C E 1972.
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legal corner
I
Alternatives to Traditional Property-Damage Insurance Offer Options to Dealers
n last month’s Legal Corner, we talked about the breakdown of the traditional methods of requiring car buyers to obtain and maintain property damage insurance. For decades, car creditors have relied on “standard” policies to protect the lien-holders’ interest in collateral. And up until about fifteen years ago, there were relatively few problems, other than the typical “low ball” valuations placed by adjustors on totaled vehicles. Legislation de-regulating the insurance industry in Texas has given rise to the expansion of so-called “limited coverage” policies that are marketed to sub-prime car purchasers at discounted premium rates. Thus, when a car creditor sends a buyer out to obtain propertydamage insurance, the buyer is likely to purchase the lowest cost product. The lowest cost product will be a policy that contains limits as to the insurer’s obligation to pay claims — limits that severely affect a lien holder’s ability to get paid when his collateral is damaged. The losspayee provision in standard policies assured lien holders they would get adequate notice of any policy changes and, in some cases, authorized payment to loss payees when a defense against the insured existed. The result of deregulation and the new wave of free-form policies is that there is a substantial chance that when an accident occurs, there will be no coverage. And, even if coverage is admitted, the settlement offer will likely come in far below industry-standard wholesale values. Insurance adjustors are now using
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their own guide books that typically value a vehicle far below what a lien holder feels is the fair market value, or what an industry standard guide pegs it at. The cost of requiring and monitoring insurance coverage for a car creditor is high. Many man-hours go into keeping up with getting proof of insurance, and tracking down cancellations, renewals and bounced checks given for premium payments. Then, when the creditor faces a total loss because of denial of coverage, it becomes abundantly clear that the return on investment for the labor expended is just not there. If a creditor chooses to stick with the traditional system of requiring property damage coverage, and relying on the debtor to obtain it, we would recommend a few steps to maximize the chances of recovery when the loss takes place. First, care should be taken to confirm that the creditor is listed as the loss payee. We have seen cases where insurance settlement checks were issued solely to debtors, who of course cashed the checks and abandoned their wrecked vehicles. When there is no loss payee listed, the insurance
by Michael
Dunagan
W.
TIADA GENERAL COUNSEL
The lowest cost product will be a policy that contains limits as to the insurer’s obligation to pay claims — limits that severely affect a lien holder’s ability to get paid when his collateral is damaged. company is free to pay the name insured (the debtor) without any obligation to the lien holder. It is also worthwhile to advise debtors before they purchase insurance that limited policies (excluded drivers or name driver only) will not be accepted. The Office of Consumer Credit Commissioner has issued an opinion letter affirming the ability of a car creditor to reject named-driver-only and excluded-driver policies. The proof of insurance provided after the purchase should be checked for excluded drivers and named-driver only coverage and 11
Upcoming Events
TIADA DEALER ACADEMY Online registration available www.txiada.com
December 2015 7 Keeping Your Dealership
Legal and Compliant DoubleTree by Hilton Hotel Dallas Market Center 2015 Market Center Blvd., Dallas, TX 75207 214.741.7481
February 2016 8 Keeping Your Dealership Legal and Compliant Houston, TX
April 2016 11 Keeping Your Dealership
Legal and Compliant Belton, TX
June 2016 6 Keeping Your Dealership
Legal and Compliant Tyler, TX
OTHER TIADA EVENTS January 2016 18 TIADA Board of Directors Meeting Austin, TX
April 2016 18 TIADA Board of Directors Meeting Austin, TX
July 2016 24 TIADA Board of Directors Meeting San Antonio, TX
24-26 TIADA Annual
Conference and Expo J.W. Marriott Hill Country Resort and Spa San Antonio, TX
12
rejected if these provisions appear. One problem dealers face is that the exclusion provisions often take the form of coded references listed as endorsements. Without an insider translation guide, the creditor often doesn’t know what the coded numbers mean. One declaration page actually received by a dealer listed the following endorsements: “515A, OACM.PhysDam.001, OACM.YCA.002, OACM. Storage.004, OACM.DelFee. oo5, OACM.ContLiab.0C6, OACM.AutoTerm.007, OACM. MisrepFraud.OO9, OACM. CrimeIntentRentProp.010, OACM.RentPropAuthDriv.012a, OACM.CP.013c, OACM. OutOfState.016a, OACM. RentProp-NOAuto.C19, OACM. AuthDriv.003a.” What kind of coverage was the lien holder getting? Your guess is as good as mine. Additionally, we find that limited coverage endorsements are often added after the initial proof of insurance is issued. Sometimes a copy of the change is sent to the loss payee, but we’ve seen situations where the creditor got no notice of the added endorsements (that is, until after the loss took place and coverage was denied). A law passed by Texas legislature in 2013, and backed by TIADA, requires disclosure to consumers and on proof of insurance certificates that an auto policy is a “limited” policy. Attempts to prohibit limited policies in the last two legislative sessions have failed. Also look for “retroactive cancellation” rights that allow an insurer to deny the claim, even though a binder has been issued. For instance, one company reserves the right to deny a claim, even though proof of coverage has been issued by the company and accepted by a car creditor, if a check given for the premium payment is later returned unpaid. We’ve actually seen a case where the debtor ran to the bank
— after the accident occurred — to stop payment on the check given hours earlier as the initial premium payment. The claim was denied because the policy was considered cancelled at the point of issuance. Despite a creditor’s best efforts at scrutinizing insurance proof forms and monitoring of cancellations and renewals, it is still very difficult to be assured that payment will be made when a loss occurs. The problem, as we see it, is that the debtor controls many of the steps in the process, and the debtor’s interests often conflict with the car creditor’s interests. By delegating these steps (such as going out into the market place to purchase insurance and making premium payments) to the debtor, the creditor loses control of the insurance process. Also, the back-end part of the process, that is, the adjustment and payment of claims, is often in the control of the insurance company and the debtor. For instance, many lien holder claims are denied because the debtor refuses to communicate or “cooperate” with the insurance company. The nature of the relationship between the creditor (pay me fast and pay me in full) is in direct contradiction to the interests of the insurance provider and/or claims adjustor (pay fewer, pay less, pay slow). It would seem, then, that a better method of protecting collateral, or of minimizing the risk of loss, would involve (1) more control of premium payments by the dealer (to avoid non-payment or bounced checks); (2) more influence in the choice of insurance policies and of the terms of the insurance policy (that is, the elimination of insurance Russian Roulette in accepting declaration pages that disguise what is and what isn’t covered through a series of known-onlyto-the-insurance-industry codes, and are subject to change and limitations); and (3) more involvement in the adjustment of claims and payment after the loss occurs. In a perfect world, the ready-made solution would contain T e x a s
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all three of these goals, but even in the real world, there are alternatives that offer variations of one or more of these standards that greatly reduce the odds of facing a total loss when damage to collateral occurs. While the Texas Finance Code prohibits a car creditor from dictating the source of insurance as a condition of financing a vehicle, it does allow and authorize a creditor to offer, sell and/or finance property damage insurance. There is no legal obstacle to offering a particular type of insurance coverage as long as it is from a company licensed to do business in Texas and is a type of insurance typically offered to the public. There is also no prohibition on recommending agents or companies that provide policies that better protect the lien holder. However, the buyer is entitled by law to obtain the required insurance from its own source. If the debtor fails to provide or maintain the required insurance, the creditor can purchase substitute coverage (either single-interest or double-interest) and add the premium to the contact. Here are some of the alternatives available to car creditors in protecting collateral:
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Please Welcome Our Newest TIADA Members DEALER MEMBERS A & N Motors Inc Nicolas Sam 3906 Waldo St #2B Houston, TX 77063 A-1 Auto Sales & Trade John Shah 3907 Irvington Blvd Houston, TX 77009 A. B. Motors George Agaybi 1115 Uvalde Rd Houston, TX 77015 Austinite Auto Sales, LLC ‘Sam’ Hesham Esawy 904 Wagon Trail Austin, TX 78758 Auto Max George Agaybi 1115 Uvalde Rd Houston, TX 77015 Autohouse Auto Finance Brian Pool 12980 Hwy 155 S Tyler, TX 75703 Countryside Auto Sales Gary Shockey 12019 San Pedro San Antonio, TX 78216 Edna Motors Tommy Pesek 210 N. Wells Edna, TX 77957 Fleet Auto Finance Ahmed Mahmud Houston, TX 77050 Fleet Trucks & Vans Jim Davis 5818 Leopard Corpus Christi, TX 78408 Houston Motors, LLC Michael Jackson 4235 S Main Street Stafford, TX 77477 JapanDrift.net Won Yoon 1951 W. Division St Arlington, TX 76812 JD Motors Joseph Dib 6710 Burbet Rd Austin, TX 78757 M. A. Auto Sales George Agaybi 1115 Uvalde Rd Houston, TX 77015
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McCoy Towing & Recovery Ron McCoy 2747 North FM 908 Rockdale, TX 76567 Mr. Victors Ltd Co Victor Daniec P.O. Box 2604 Edinburg, TX 78540 Paul Young Cars Paul Young 3701 E Saunders, Suite C Laredo, TX 78041 Premium Automotive Harmon Diaz 122 N McColl Rd Edinburg, TX 78541 Sansone Motor Cars, LLC Dominic Sansone 712 N. Main Street Keller, TX 76248 Spring Motor Sport Imad Ikhbeis 2702 Louetta Rd Spring, TX 77388 SR Auto Group M. Aljandali 6120 Long Dr Houston, TX 77087 Tony’s Used Cars Rami Tony 2801 Texas Ave La Marque, TX 77568 Universal Credit “Jimmy” Wael Elhaj 3535 Hwy 6 S Houston, TX 77082 Win Auto Center, LLC David Taylor 878 US Hwy 271 North Gilmer, TX 75644 Zoom ATX LLC Fadi Al Chaer 909 Prairie Trail Austin, TX 78758 ASSOCIATE MEMBERS Cornwell Jackson Derek Northup 6865 Wind Crest Dr; Suite #100 Plano, TX 75024 Kiss Concepts Group, LLC James Peacock PO Box 100971 Ft. Worth, TX 76185 QuoteWizard Adam Johnson 157 Yesler way Seattle, WA 98104
of a self-insurance approach is to eliminate the employee time required to verify insurance, deal with cancellations and renewals, and hassle with adjustors. Also, the dealer isn’t competing with insurance premiums for the customer’s limited dollars.
“Standard” Policies
There are sources out there that offer Texas driver’s policies that look like the old Texas “standard” policies that cover all the things that were covered before insurers started selling limited-coverage policies. Under some of these programs, a dealership employee can apply for coverage at the time of sale of the vehicle. Buyers can also be referred to agents that sell these policies with the understanding that limited policies are not acceptable. Some of the “standard” policies include liability insurance. While a dealer is not required to verify liability insurance, it’s still a good idea to encourage debtors to have liability. In addition to the fact that liability is required by state law, many local police agencies are impounding vehicles when the driver can’t produce proof of liability during a traffic stop.
Single-Interest Insurance
Single-interest has been around forever, but is rarely used by BHPH dealers. It is expensive and can typically be added to a contract only after the buyer has failed to obtain or maintain regular insurance. As is the case with any forced-placed insurance, it is difficult to get a sub-prime car debtor to make larger payments than originally contracted for to cover the additional cost.
Collateral Protection Programs
BHPH dealers in Texas and other states have for years been offering their customers a form of insurance for which the dealer controls the collection of and payment of premiums. These policies protect the lien holder’s interest only, and claims payments are made directly to the lien holder. These policies usually don’t involve any underwriting of the driver or the vehicle. While these programs have traditionally carried more appeal to higher-volume dealers, many small-to-medium size operations have recently started using them.
Debt-Cancellation Agreements
The Texas legislature, at the urging of TIADA, authorized in 2009 the inclusion in a motor vehicle retail installment contract of a charge for a debt cancellation agreement. The debt cancellation program can be self-operated by the dealer or can be based on a commercial product with some type of re-insurance (see Debt Cancellation Coverage T e x a s
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Programs below). The debt cancellation agreement is to provide that any balance owned would be forgiven if a vehicle is a total loss or is stolen. The charge for the agreement is limited by a rule passed by the Office of Consumer Credit Commissioner. DCA’s are by statute not considered insurance. A vehicle seller can’t require purchase of the DCA as a condition of financing. The DCA can be sold in addition to an insurance requirement, but at a lesser charge than what can be charged if the motor vehicle contract does not require insurance coverage. Some of the obvious advantages of selling DCA’s is that (1) less employee time is required to chase insurance cancellations and renewals; (2) for those customers who purchase the DCA, there is no hassle with insurance adjustors; (3) the charge can be added to the contract so the additional financial
stress to the customer of having to come up with insurance premium payments is eliminated.
Debt Cancellation Coverage Programs
There are debt-cancellation-type products available in the industry market place that have all the benefits of a DCA but also include a form of re-insurance. The reinsurance offers a potential profit-center for the dealer along with federal income tax treatment that is more favorable than a unilateral DCA charge placed on the contract by a dealer. Turn-key programs are available that can get a dealer up-and-running in a short time. For those BHPH dealers (and other car creditors) who have been experiencing problems in policing their customer’s insurance coverage, and are experiencing more and more claims turn-downs because of limited policies, there are alternatives
available. No one approach is appropriate for everyone, but the time spent researching how each of these alternatives could help the dealer and his customers would be time well spent. [Editor’s Note: TIADA does not endorse or recommend any service or product and makes no representation as to the legality or governmental approval of the services and products listed. Dealers should perform their own due diligence before using any service or product.] Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 35 years. He has written a number of books and hundreds of articles for trade journals and law reviews. His clientele includes dealers, banks, finance companies, auto auctions and credit unions.
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Celebrating Eight Straight Years on the Card Special Thanks to Our Long-Time Supporters — With Us From the Beginning!
Manheim Dallas Manheim DFW Manheim Houston Manheim Texas Hobby Manheim San Antonio Manheim El Paso Houston Auto Auction
Insurance Auto Auctions Houston Insurance Auto Auctions Dallas Insurance Auto Auctions Austin Insurance Auto Auctions San Antonio Dealers Auto Auction of Oklahoma City Heart of Texas Auto Auction Waco America Can! Cars for Kids
What is the VIP Auction Card, Anyway? When you join the association or renew your membership, you will be sent the 2016 VIP Auction Card. It is a tri-fold card that fits in your wallet. When you buy or sell a vehicle at any of the participating auctions, present this card. Each auction will give you a FREE one-time buy or sell fee* (up to $200.) That’s it — be a TIADA member, save hundreds of dollars in inventory acquisition. Renewing your TIADA membership should be a no-brainer!
TIADA introduced the VIP Auction Card in 2008, with 24 participating locations. Over the last eight years, the card has grown to include 44 auctions, all across the state. A special thank-you to all the auctions over the years for supporting TIADA, our members and the industry with your generous participation.
Texas I n d epen d ent A utomob i l e D ea l ers A ssociation
2016 VIP Card pictured
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Texas I n d epen d ent A utomob i l e D ea l ers A ssociation
December 2015
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on the cover
(Editor’s note: The following questions were taken from information that was published in a Legal Corner or Regulation Matters column in a 2015 issue of Texas Dealer magazine.)
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1. A liability insurance company, when settling a case for damages to collateral caused by their insured:
a. M ust investigate lien status only if the damage exceeds $2,000. b. M ust include the lien holder’s name on a settlement check issued to cover damage to the collateral. c.M ust make all checks for property damage payable to both the owner and lien holder if the amount exceeds $2,500.
d. Must pay the owner and lien holder the amount needed to repair the vehicle less the deductible.
2. True or False: As long as a dealer does not
charge a documentary fee of more than the $125 “safe harbor” amount, the dealer does not need to notify the OCCC.
3. True or False:
A dealer doesn’t have to transfer title to a buyer who defaults on the first payment. T e x a s
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4. Which of the following statements regarding odometers is correct?
a. Only a licensed mechanic may legally change out an instrument cluster. b. Generally speaking, the true mileage on a vehicle is not considered to be a material fact that the buyer relies upon when making a purchase decision. c. If an instrument cluster is repaired or replaced, the owner of the vehicle or agent of the owner shall attach a written notice to the left door frame of the vehicle specifying the mileage before the service, repair, or replacement and the date of the service, repair, or replacement. d. None of the above
5. The legal term for a court order that directs an officer to take possession of property is a writ of _______________: a. Possession b. Replevin c. Sequestration d. Trover
6. True or False: Both the state’s and the
inspection station’s portion of the inspection fee may be passed through to the customer, provided the dealer actually incurs those costs and retains the inspection station receipt.
7. A lien on a vehicle becomes “perfected” at what point?
a. When the state issues a title certificate with the lien recorded on it. b. When the county tax office accepts the assigned title and transfer fees. c. When the buyer signs the motor vehicle installment contract. d. When the buyer signs the Form 130U.
8. True or False: Under current law (as of
December 2015), in order for a dealer to register his/her customer’s vehicle, that vehicle must have had a current, passing inspection in the 90 day period prior to the registration application.
9. True or False:
A dealer can avoid being obligated for the sales tax on a vehicle sale by delivering the title certificate and filled-in transfer papers to the buyer. December 2015
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10. A licensed VSF’s (Vehicle Storage Facility) storage lien is ______ to a prior recorded car creditor’s lien. a. Inferior b. Superior c. Equal d. Second cousin, once removed
11. True or False:
A Related Finance Company is required to have a separate OCCC Vehicle Finance License even if ownership is 100 per cent identical to the dealership.
12. Changing your business form from sole proprietor to LLC is ______ .
a. A n undertaking with potential complications. b. S omething upon which an attorney and/or CPA should be consulted. c. I llegal in Texas d. B oth a) and b)
13. Which of the following puts a creditor on official notice that a debtor has filed bankruptcy:
a. A hand-written note from the debtor. b. A file-marked notice from a bankruptcy court. c. A fax from the debtor’s attorney’s office. d. A phone call from the debtor. e. A ll of the above
14. When it comes to a vehicle with an open safety recall…
a. D ealers may not sell such a vehicle. b. D ealers do not need to disclose the open safety recall status to a potential buyer. c. Th ere is no VIN-specific way to verify if a particular vehicle has an open safety recall. d. none of the above
15. True or False:
A car creditor that requires property-damage coverage on its collateral can reject a policy with a term of less than six months.
16. True or False:
The consent order issued by NHTSA to Fiat Chrysler Automobiles (FCA) earlier this year that required FCA to buy back certain unrepaired vehicles (mainly Dodge Rams 2008-2012) does not apply to vehicles held by independent dealers.
17. The debt cancellation provisions of a Debt Cancellation Agreement kick in upon which of the following: a. The collateral is totaled. b. The collateral is stolen. c. The collateral is used in the commission of a crime. d. The engine locks up. e. Both a. and b.
18. Which of the following documents is NOT required in every deal jacket for a Texas buyer?
a. VTR 136 County of Title Issuance b. VTR 271 Power of Attorney to Transfer Motor Vehicle c. VTR 500 Title Application Receipt (the “white slip”) d. Buyer’s guide (As-Is) e. Customer’s ID
19. The IRS requires BHPH dealers to use which accounting basis in calculating taxable gain on receivables: a. Cash basis b. Accrual basis c. The declining balance basis d. Accrual less deduction for anticipated losses
20. True or False: A study by the
American Customer Satisfaction Index indicates that car buyer satisfaction is down for the third straight year. The study suggests that Obama administration policies and a surge in safety recalls (nearly 64 million in 2014) are the primary driving forces behind consumers’ increasing disgruntlement.
Answers can be found on page 44. 19
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feature Dealer Information from the Texas Comptroller Provided by Texas Comptroller of Public Accounts Staff
MOTOR VEHICLE SALES TAX – TAX COMPLIANCE REMINDERS
Completed Texas Motor Vehicle Sales Tax Exemption Certificate — For Vehicles Taken Out-of-State (Form 14-312) when appropriate
A
s a Texas motor vehicle dealer, you contribute significantly to the Texas economy through voluntary tax compliance. Part of this compliance is maintaining proper records. This article is designed to assist you in keeping those records. We have also identified some points to help motor vehicle seller-financed dealers comply with their special requirements. In addition, we’ve included information on how you can take advantage of purchasing certain parts and accessories tax free.
RECORDKEEPING – ALL DEALERS
Your records must be available to the Comptroller for four years from the date of sale. If you handle consignment sales, you have the same recordkeeping responsibilities as a dealer.
RECORDKEEPING – SELLER-FINANCED SALES
The Tax Code is specific on your recordkeeping responsibilities. You must keep the following records: Sales invoice Record of your total receipts from all income sources Copy of the payment method, such as a check, or a receipt for cash payment when the payment is made in full at the time of the sale Copy of the Application for Texas Title (Form 130-U) Copy of receipt for tax, title and license issued by the County Tax Assessor-Collector Completed Texas Motor Vehicle Sales Tax Resale Certificate (Form 14-313) when selling to another Texas dealer for resale
If you are a seller-financed dealer, in addition to the documents listed above, you must keep these records: Lienholder’s copy of receipt for tax, title and registra tion issued by the County Tax Assessor-Collector Ledger or similar record with the: • Name and address of the purchaser • Sales price (total consideration) • Down payment(s) • Date and amount of subsequent payments • Date of the sale • Date of any repossession
Your records must be available to the Comptroller for four years from the date of the last payment or any repossession.
SELLER-FINANCED SALES – POINTS TO REMEMBER Dealers making seller-financed sales must have a Motor Vehicle Seller-Financed Sales Tax Permit.
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Although you collect tax on a payment basis when making seller-financed sales, you should keep the following points in mind to avoid acceleration of tax: When calculating tax, it is presumed that interest accrues and is paid on a straight-line basis. In other words, once you collect tax on any down payment, the remaining tax due is collected equally on each payment. A seller-financed vehicle is considered paid in full when that vehicle is used as a trade-in on another transaction, and you must remit the remaining tax due on the vehicle used as a trade-in. You can use the trade-in vehicle as a deduction in computing the tax due on the second transaction. Tax remitted to the County Tax Assessor-Collector at the time of title and registration satisfies the tax liability for that transaction. You cannot take a bad debt deduction for these taxes remitted to the county. If you don’t apply for title and registration within 60 days from the date of sale, the tax accelerates, and you are liable for all unremitted tax at that time. You must remit the tax on your next return. (The time limit affects only the tax acceleration, not the usual due dates). If you transfer the right to receive payments to anyone oth er than a registered related finance company (see below), the remainder of tax due accelerates at that time and you must remit it on your next return. No deduction can be taken for notes sold at a discount or if recourse is agreed.
RELATED FINANCE COMPANIES
You do not incur the acceleration of tax when you transfer notes to an associated related finance company (RFC) with an active registration with the Comptroller. The RFC must renew its registration each year and submit an annual $600 registration fee. When you transfer notes to an RFC, as the selling dealer, you must continue collecting and reporting motor vehicle sales tax as the payments are collected from the customer.
REPAIR PARTS/ACCESSORIES FOR VEHICLES HELD FOR RESALE
If you have a Texas Sales and Use Tax Permit, you can issue a resale certificate to purchase repair parts or accessories that are used on vehicles held exclusively for resale. This permit is different from a Motor Vehicle Seller-Financed permit. If you do not have a sales tax permit, you can apply online at http://www.comptroller. texas.gov/taxpermit/.
MORE INFORMATION
Related rules, publications and links to Texas Tax Code Sections 111.0041, 152.063 and 152.0635 are online at www.comptroller.texas.gov. You can also contact the Comptroller’s office at comptroller.texas.gov/taxhelp/ or by calling 1-800-252-1382.
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feature
Education, Communication, Cooperation and Expectations In the Administrative Violation Process by Ray Willoughby
Managing Attorney, Enforcement Division Texas Department of Motor Vehicles
T
xDMV is pleased to work with TIADA and other industry stakeholders to help cooperatively educate the dealer body. Last December’s edition of Texas Dealer listed the top 10 most violated motor vehicle dealer laws with the hope that by knowing what violations occur most often dealers would take precautions to avoid them. As a follow up to that article, in this edition I will summarize the administrative violation process and the parties’ respective roles in that process. I have used as few words as possible so you can quickly read the article and go do something fun for the holidays. I hope you find the information beneficial and easy to understand.* Education, Communication, Cooperation and Expectations (ECCE) are four common words that, when applied, can have a profound impact in the creation of a successful relationship between a regulated community and the regulator. The more the two parties interact through ECCE the more they come to realize they have several common goals. Primary among the goals is creating a level business playing field where the participants cannot openly circumvent the law to gain a market advantage or harm consumers. In order for both parties to achieve mutual goals they must educate themselves in the business practices of the other and the laws related to business operations. The parties must foster an atmosphere where open communication and cooperation results in achieving positive outcomes and meeting expectations. These outreach efforts are especially important to have before and during the administrative violation process. The TxDMV Enforcement Division (division) actively pursues ECCE. The division provides education to licensees by providing year-round dealer training seminars and publishing various instructional materials on how to lawfully operate a motor vehicle sales business. The division fosters communication and cooperation by responding to compliance questions, participating in industry sponsored events, such as the TIADA Annual Conference, and working with all levels of license holders and motor vehicle industry representatives on matters of mutual interest. These endeavors allow the division to gain insight into current motor vehicle dealer needs and trends as well as transmit and receive expectations. Nowhere can ECCE have more impact than in the administration violation process. For most dealers the only
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formal contact they will ever have with the division is when a complaint is received, is investigated and an action is taken. The process can be a source of contention between the parties and, more so, if a dealer knows little or nothing about what to expect. If the principles of ECCE are used a dealer’s stress can be reduced or eliminated. The remainder of this article is devoted to outlining the administrative violation process and how the elements of ECCE may have an impact on making the process flow smoothly for both parties. I have chosen to use a question and answer format.
Question: What is the best way to avoid violations? Answer: The obvious answer is to follow the law. All of the top 10 dealer violations are easily preventable by knowing what the law is and establishing business practices that are in line with it. If in doubt about a proposed practice, contact TIADA, consult the resources provided by the division, call us or seek private legal counsel. Despite being titled the “Enforcement” Division, we believe our primary mission is to help dealers avoid violations through ECCE efforts. We make every effort to ensure that TIADA and our other industry stakeholders are made well aware of any changes to policy, procedures and relevant administrative rules.
Question: What can a dealer expect from the division
when a violation is discovered? Answer: If a violation does occur a dealer can expect the process, from investigation to final disposition, to be thorough, fair and free of bias and unlawful influence. Before administrative charges are filed against a dealer the circumstances and evidence will be reviewed several times including by managerial personnel. A dealer will be treated throughout the process in a professional manner and can feel free to communicate openly with the division investigator and attorney. The division will listen to what a dealer has to say about the violation and take into consideration relevant matters of extenuation and mitigation.
Question: What does the division expect from dealers? Answer: To communicate openly with us, use the re-
sources and assistance the division provides, and to put forth efforts to avoid violating the law. When a dealer is notified of a complaint or charged with a violation, the dealer T e x a s
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should cooperate with the division investigator and attorney by providing all requested records and be responsive when discussing the allegations with them. Cooperation and communication benefit both sides in the process. After following the law the most important expectation the division has of a dealer is to keep a current mailing address on file with the TxDMV Motor Vehicle Division. If a dealer fails to report a change of mailing address and, as a result, does not receive notice of a violation, the process will continue and can result in serious consequences including revocation of the motor vehicle dealer’s license. If you remember only one thing from this article, please let it be this point.
Question: How will a dealer be notified of a violation? Answer: If a violation case is not closed with the issu-
ance of a Warning Letter or other informal disposition, a division attorney will prepare and mail the dealer a Notice of Department Decision (NODD) which explains the violation and the dealer’s options to respond.
Question: What does a dealer do if it wants to discuss an informal settlement of the case?
Answer: First, submit the Request for Hearing form,
which accompanies the NODD, to the division no later than the 26th day after the NODD is issued. This suspends but does not end the proceeding. After timely submitting the Request for Hearing the dealer should discuss the case with the division attorney in an open and honest manner. If a settlement can be reached, the attorney will prepare and mail an Agreed Final Order which the dealer signs and returns. If the parties have agreed that the case will be settled with the dealer paying a civil penalty (a fine), payment for the correct amount of the penalty must be sent in with the signed
agreed final order. The agreed final order is then presented to the Motor Vehicle Division director, who after reviewing the order will, in most cases, sign the order. This concludes the proceeding. The dealer must then comply with the terms of the agreement.
Question: What happens if an informal settlement cannot be reached? Answer: If the dealer has timely requested a hearing and no settlement can be reached, the matter will be set for formal hearing before a judge at the State Office of Administrative Hearings. At that hearing both parties will present their version of the events that resulted in the case being filed. Following the hearing, usually within 60 days, the judge will issue and mail to both parties an opinion (called a Proposal for Decision, or PFD) containing findings of fact and conclusions of law. The parties can file comments or exceptions to the judge’s PFD. The case will then go to the TxDMV board, who will review the PFD from the judge and arguments submitted after the hearing by the parties, if any, and vote on an issuing a final order. The parties can ask that the matter be reheard, but if the board decides that the order should not be changed or that a rehearing is not necessary, the order becomes final. This final order can be appealed to a state district court in Travis County. Question: What if I do not respond at all to the NODD? Answer: The division strongly recommends against
this option. While a dealer may elect to timely pay the civil penalty, if any, listed in a NODD and close the matter without further contact with the division, not responding at all is in neither party’s best interest. Responding is the best way for the division to know your version of events and whether there are reasons to dismiss or mitigate the violation.
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If a dealer chooses not to respond to a NODD the TxDMV will issue an order imposing the terms of the NODD along with any sanctions requested by the division. A copy of the final order will be mailed to the dealer. If the dealer believes the final order is wrong, it may timely file a request that the case be reheard. This is called a Motion for Rehearing. If that motion is denied the dealer can appeal the final order to a state district court. Violation of the terms of a final order which includes a civil penalty may lead to debt collection proceedings and revocation or nonrenewal of a dealer’s license. Please understand that the possible consequences facing a dealer after a complaint has been filed are mentioned here not to intimidate the reader, but rather to educate a dealer about what to expect if the dealer does not respond when notified of a violation and/or abide by terms of a final order. The division hopes that by knowing what can happen a dealer will always choose to timely respond to a NODD.
A few parting thoughts
The division will always try to resolve violation cases fairly by taking into consideration all of the relevant circumstances. This can only be accomplished when a dealer knows what is involved in the administrative violation process and actively participates in it. This is why Education, Communication, Cooperation and Expectations are so important.
While the division is happy to respond to dealer compliance questions it cannot offer any legal advice regarding a particular transaction, especially after a complaint has been filed. The division can only advise a dealer in general terms whether an activity is within the jurisdiction of the TxDMV and is legal under Texas law. Please call the division at (512) 465-4205 if you have motor vehicle dealer compliance questions. Dealers may also find relevant information on the TxDMV website at http://www.txdmv.gov/ under the “Dealer” tab at the top of the home page. The employees of the enforcement division wish all of you happy holidays and a very prosperous new year. *This article should not be construed whatsoever as providing legal advice. The statements in this article may not be cited as legal precedent or as a defense to an enforcement action filed by or on behalf of the TxDMV. The article is a general discussion of the TxDMV administrative violation process and possible scenarios involved in that process. The violation process is a contested case proceeding held under Texas Government Code Chapter 2001. Dealers are encouraged to seek private legal counsel if so desired if they receive a Notice of Department Decision described in the article. No one from the TxDMV will act as a dealer’s representative or legal counsel during any phase of an administrative violation proceeding. This article is the author’s personal opinion. The article is not a legal opinion from the TxDMV nor does it necessarily constitute the position of the TxDMV, any of its officers, employees, the TxDMV Board or any individual Board member.
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board of directors meeting minutes October 12, 2015 | Hilton Austin Airport
compiled by Texas Dealer staff
At its meeting on Monday, October 12, 2015, TIADA took the following actions: President Phil Lathrop called the meeting to order at 12:55pm
Minutes Of Last Meeting
Secretary Greg Zak presented the minutes of the last Board of Directors Meeting. A motion was made to accept the minutes. Moved by Brent Rhodes, seconded by Robert Beck – PASSED
Treasurer’s Report
Old Business None.
Treasurer Trey Crouch presented the Treasurer’s report. A motion was made to accept the report. Moved by Kathrine Tolsch, seconded by Juan Sabillón – PASSED
New Business
President’s Report
A motion was made to authorize TIADA to transfer $23,200 from its reserve account to offset the expense of creating an online pre-licensing education course. The association will replenish the funds in this manner: at the end of the current and next two fiscal years (FY16-FY18), the association will repay the reserve account 1/3 ($7,600) of the amount transferred utilizing that fiscal year’s retained earnings. If retained earnings from any fiscal year are insufficient, the shortage will be transferred to the reserve account from the association’s operational account. Moved by Juan Sabillón, seconded by Dan Keetch – PASSED Main motion as amended -PASSED
Phil Lathrop mentioned the upcoming NIADA leadership conference to be held in Washington, DC. He discussed his participation on a CFPB meeting regarding arbitration agreements.
Executive Director’s Report
Jeff Martin presented the Executive Director’s report where he: Discussed the RFC renewals with comptroller. Shared formal comments submitted to OCCC as well as ongoing relationship building. Reviewed the list of contributors to the association’s political action committee, INDEPAC. Discussed the BHPH commission and its upcom ing meeting at the NIADA leadership event in Washington, DC.
A motion was made to accept the FY 16 budget as amended. Moved by Greg Zak, seconded by Wayne Meagher – PASSED
A motion was made to update the fixed asset policy to adjust the capitalized items cost from $450 to $1,000. Moved by Greg Zak, seconded by Brent Rhodes – PASSED
Danny Langfield discussed Powers of Attorney and VTR’s concerns with regard to their misusage.
A motion was made to adjourn the meeting. Moved by Dan Keetch, seconded by Ryan Winkelmann
Danny Langfield presented a logo refresh being considered.
Meeting adjourned at 5:47p.m.
Executive Session
The board recessed to executive session from 3:00p.m. – 4:16p.m. No actions were taken from executive session.
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Trey Crouch discussed proposed budget amendments for the FY16 budget. Jeff Martin shared the Annual Conference & Expo survey results. Danny Langfield reviewed the pre-licensing education initiative. Jeff Martin presented the 5-year Strategic Plan.
Respectfully submitted, Greg Zak, Secretary A complete copy of any reports referenced in this document and more detailed notes from the meeting are on file at the TIADA office and available upon request. T e x a s
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regulation matters
Keep the Surprises Under the Tree: Run a Title Check
N
MVTIS, the National Motor Vehicle Title Information System (commonly referred to as, “Nim-Vitt-Iss”) is a government resource that was established to provide a national clearinghouse for information on a vehicle’s title, most recent odometer reading, brand history, and, in some cases, historical theft data. NMVTIS incorporates information provided by various entities including state motor vehicle titling agencies, automobile recyclers, junk and salvage yards, and insurance carriers. The purpose of NMVTIS is to provide vehicle purchasers, including dealers, with information on a vehicle’s history that may not otherwise be available. So, just how valuable might that information be to you, a Texas independent dealer? Well, depending on the situation, more valuable than you might think. Let’s say you are looking at taking a trade in. The owner produces what appears to be a clean title, lien paid off, with no brands. You do the deal, clean up the car and put it out for sale. A few days later, a customer comes in and buys the vehicle, financed through his credit union. You deliver the vehicle, then complete the paperwork and take the title down to the county to transfer ownership into the purchaser’s name and record the lien, like normal. Here’s where it gets ugly. A week later that customer comes screaming back into your store, waving some letter about the vehicle you sold him, demanding to know
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by Danny
Langfield
TIADA DEPUTY DIRECTOR
...running a NMVTIS prior to acquisition of a vehicle may save some unpleasant surprises in the long run. why you didn’t tell him the car was salvage rebuilt. “Salvage rebuilt?” you think, “What the heck is this guy jabbering about?” You have a look at the letter and, sure enough, there is a statement from TxDMV that the vehicle you just transferred has a SALVAGE REBUILT brand in its title history and that the buyer has 10 days to dispute the brand. If he is unable to provide sufficient evidence that the brand should not be applied (the letter states), the agency will issue the title with the appropriate brand. Suddenly the phone rings. It is the customer’s credit union. They are in receipt of T e x a s
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the same letter and they want to know what the heck is going on, as well. Houston, we have a problem. So, how could this happen? You hand in a clean title to the tax office for transfer and the state ends up sending out a branded title? The answer lies with NMVTIS. On May 12, 2014, Texas started running a NMVTIS query on all title transfers. If the NMVTIS report comes back with a title brand, the letter described above is sent to the applicant and lienholder, and the brand information is added when the new title is issued. But how was the owner who sold you the trade in able to produce a clean title? There are a myriad of explanations, but most commonly, the SALVAGE REBUILT brand had dropped off the title when the vehicle was sold and the title processed in another state. Then, when TxDMV hit the NMVTIS database when processing your transfer, the former title brand was discovered and disclosed. As you can see, running a NMVTIS prior to acquisition of a vehicle may save some unpleasant surprises in the long run (See sample report, pgs. 32-33). Dealers are able to get NMVTIS information as a stand-alone report, or as an additional component to a vehicle history report provider such as Carfax or AutoCheck.
Might there be important information about the vehicle that is not found on a vehicle history report? Of course — veteran dealers know it happens all the time (and don’t let’s get started on information that IS included, but is NOT correct). But with regard to NMVTISspecific information that will be included on the new title, the information provided to a dealer through an NMVTIS check is the same information that will be provided to the county when the new title is processed. The only “surprise” would be any information added to the NMVTIS database AFTER the dealer runs a check, but before the new title is issued. To find out how you can access NMVTIS data, visit: http://www.txdmv.gov/motorists/ buying-or-selling-a-vehicle/ title-check-look-before-you-buy and select the ‘Dealers’ tab, where you will find a list of approved NMVTIS title history report providers. Special thanks to TxDMV’s Clint Thompson, Chief of Title Services for the Vehicle Titles & Registration Division, for his assistance with this column.
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Vehicle History Report VIN:1VXBR12EXCP901213
Report ID: VinAudit.com #932740318 Generated: 2012-09-16 17:09:47 PDT
Vehicle Specifications
This section lists the detailed specifications for the vehicle encoded by the VIN number. Vin
1VXBR12EXCP901213
Trim
CE
Steering Type
R&P
Overall Length
178.30 in.
Make
Toyota
Style
Sedan 4-Dr
Tank Size
13.20 gallon
Highway Mileage
38 - 41 miles/gallon
Year
2005
Engine
1.8L L4 DOHC 16V
Anti-Brake System
4-Wheel ABS
Overall Width
66.90 in.
Model
Corolla
Made In
United States
Overall Height
58.50 in.
City Mileage
30 - 32 miles/gallon
Title Records
This section lists state title records. Please contact the states listed below to request details.
Date
State of Title
Type
Mileage
VIN
08/31/2011
Washington
Current
59,396 mi.
02/23/2008
Wisconsin
Historical
37,398 mi.
1VXBR12EXCP901213
11/04/2007
Wisconsin
Historical
12,269 mi.
1VXBR12EXCP901213
08/19/2005
Ohio
Historical
3,220 mi.
1VXBR12EXCP153842
06/22/2005
Ohio
Historical
1VXBR12EXCP153842
Junk / Salvage / Insurance Records This section lists associated junk, salvage, and insurance records.
Source: NMVTIS
Date
Reporting Entity
Details
10/25/2007
Insurance Salvage, Inc. Milwalkee, WI Phone: 5556478921
Damage type: Junk And Salvage Disposition: Sold Intended for export: NO
Problem Checks
This section lists our checks for potential problems related to your title.
32
Source: NMVTIS
Source: NMVTIS
Record of Flood damage?
No problems found!
Record of Hail damage?
No problems found!
Record of Vandalism?
No problems found!
Record of Dismantled?
No problems found!
Record of Fire damage?
No problems found!
Record of Salt water damage?
No problems found!
Record of Kit?
No problems found!
Record of Junk?
No problems found!
Record of Rebuilt?
Record found! Brand Date: 08/19/2005 Brander: Ohio (State) Disposition: Rebuilt
Record of Reconstructed?
No problems found!
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Record of Logging Vehicle?
No problems found!
Record of Vehicle Contains Reissued VIN?
No problems found!
Record of Totaled?
No problems found!
Record of Bond Posted?
No problems found!
Record of Parts Only?
No problems found!
Record of Undisclosed Lien?
No problems found!
Record of Vehicle Non-conformity Uncorrected?
No problems found!
Record of Vehicle Safety Defect Uncorrected?
No problems found!
Record of VIN Replaced?
No problems found!
Record of Gray Market: Compliant?
No problems found!
Record of Former Rental?
No problems found!
Record of Salvage--Reasons Other Than Damage or Stolen?
No problems found!
Record of Prior Non-Repairable / Repaired?
No problems found!
Record of Odometer: Actual?
No problems found!
Record of Odometer: Tampering Verified?
No problems found!
Record of Odometer: Exceeds Mechanical Limits?
No problems found!
Record of Odometer: Replaced?
No problems found!
Record of Odometer: Discrepancy?
No problems found!
Record of Odometer: Call Title Division?
No problems found!
Record of Odometer: Exceeds Mechanical Limits Rectified?
No problems found!
Record of Street Rod?
No problems found!
Record of Replica?
No problems found!
Record of Owner Retained?
No problems found!
Record of Memorandum Copy? Record of Salvage--Damage or Not Specified?
Record of Test Vehicle? Record of Refurbished?
Record found! Brand Date: 08/02/2005 Brander: Ohio (State) Disposition: Salvage
Record of Recovered Theft?
No problems found!
Record of Prior Owner Retained?
No problems found!
No problems found!
Record of Vehicle Non-conformity Corrected?
No problems found!
Record of Vehicle Safety Defect Corrected?
No problems found!
Record of Gray Market: Non-compliant?
No problems found!
Record of Manufacturer Buy Back?
No problems found!
Record of Salvage--Stolen?
No problems found!
Record of Disclosed Damage?
No problems found!
Record of Crushed?
No problems found!
Record of Odometer: Not Actual?
No problems found!
Record of Odometer: Exempt from Odometer Disclosure?
No problems found!
Record of Odometer: May be Altered?
No problems found!
Record of Odometer: Reading at Time of Renewal?
No problems found!
No problems found!
Record of Collision?
No problems found!
Record of Salvage Retention?
No problems found!
Record of Prior Taxi?
No problems found!
Record of Prior Police?
No problems found!
Record of Original Taxi?
No problems found!
Record of Original Police?
No problems found!
Record of Remanufactured?
No problems found!
Record of Gray Market?
No problems found!
Record of Antique?
No problems found!
Record of Warranty Return?
No problems found!
Record of Classic?
No problems found!
Record of Agricultural Vehicle?
No problems found!
Record of Street Rod?
No problems found!
Record of Logging Vehicle?
No problems found!
Record of Vehicle Contains Reissued VIN?
No problems found!
Record of Replica?
No problems found!
Record of Totaled?
No problems found!
Record of Owner Retained?
No problems found!
Record of Bond Posted?
No problems found!
Record of Memorandum Copy?
No problems found!
Record of Parts Only?
No problems found!
Record of Recovered Theft?
No problems found!
Record of Prior Owner Retained?
No problems found!
Record of Vehicle Non-conformity Corrected?
Record of Undisclosed Lien?
No problems found!
No problems found!
Record of Vehicle Non-conformity Uncorrected?
No problems found!
problems found! NMVTISNo Disclaimer
NMVTIS Disclaimer Record of Vehicle Safety Defect Corrected?
No problems found! No problems found!
States. NMVTIS is intended to serve as a reliable source of title and brand history for automobiles, but it does not contain detailed informa
Record of Odometer: Exceeds Mechanical Limits Rectified?
Record of Vehicle Safety Defect Uncorrected?
No problems found!
The National Motor Vehicle Title Information System (NMVTIS) is an electronic system that contains information on certain automobiles tit vehicle's repair history.
All states, insurance companies, and junk and salvage yards are required by federal law to regularly report information to NMVTIS. Howev
The National Motor Vehicle Title Information System (NMVTIS) is an electronic system contains information onvehicles certainin automobiles in the does that not contain information on all motor the United Statestitled because someUnited states are not yet providing their vehicle data to the
Record of VIN Replaced?
No problems found!
vehicle's repair history. Record of Gray Market: Compliant?
No problems found!
Currently, the data provided to NMVTIS by states isdetailed provided in a variety of time frames; while States. NMVTIS is intended to serve as a reliable source of title and brand history for automobiles, but it does not contain information regarding a some states report and update NMVTIS da No problems found!
Record of Gray Market: Non-compliant?
(as title transactions occur), other states send updates less frequently, such as once every 24 hours or within a period of days.
Information on previous, significant vehicle damage may not be included in the system if the vehicle was never determined by an insuranc
All states, insurance companies, and junk and salvageNo yards are required lawappropriate to regularly report to NMVTIS. However, NMVTIS entity) to be ainformation "total loss" or branded by a state titling agency. Conversely, an insurance carrier may be required to repor problems found! by federalother Record of Manufacturer Buy Back? even if the vehicle's has not determined the vehicle "salvage" or "junk." not contain information on all motor vehicles in the States states are nottitling-state yet providing their vehicle data totobethe system. NoUnited problems found!because some Record of Former does Rental?
Before making a decision to purchase a vehicle, consumers may wish to obtain an independent vehicle inspection, a NMVTIS Vehicle His
No problems found! of time frames; while some states report and update NMVTIS data in "real-time" Currently, the data provided to NMVTIS by states is provided in a variety Record of Salvage--Stolen? consult other available vehicle information resources.
problems found!such as onceThe Record of Salvage--Reasons Other Thanoccur), Damageother or Stolen? (as title transactions states send updates No less frequently, every 24 hours or within a period of days. information in NMVTIS includes: Nonot problems found! in the system Record of Disclosed Damage? on previous, significant vehicle damage may Information participating state motor vehicle titling Information be included if the from vehicle was never determined byagencies. an insurance company (or Information on automobiles, buses, trucks, motorcycles, recreational vehicles, motor homes, and tractors. NMVTIS may not currently inclu found!agency. Conversely, Record of Prior Non-Repairable / Repaired? other appropriate entity) to be a "total loss" or branded No by problems a state titling an insurance carrier may be required to report a "total loss" vehicles if those vehicles are not included in a state.s primary database for title records (in some states, those vehicles are managed by a
Record of Crushed?
problems found! even if the vehicle's titling-state has not determined theNo vehicle to be "salvage" or "junk." agency), although these records may be added at a later time.
Record of Odometer: Actual?
No problems found!
Information on "brands" applied to vehiclesaprovided by participating state motor vehicle and titling agencies. Brand types and definitions vary b Before making a decision to purchase a vehicle, consumers may wish to obtain an independent vehicle inspection, NMVTIS Vehicle History Report,
Record of Odometer: Not Actual?
consult other available vehicle information resources.
Record of Odometer: Tampering Verified?
The information in NMVTIS includes:
Record of Odometer: Exempt from Odometer Disclosure?
No problems found! No problems found! No problems found!
Information from participating state motor vehicle titlingNo agencies. problems found!
Record of Odometer: Exceeds Mechanical Limits?
provide useful information about the condition or prior use of the vehicle. Most recent odometer reading in the state's title record.
Information from insurance companies, and auto recyclers, including junk and salvage yards, that is required by law to be reported to the s beginning March 31, 2009. This information will include if the vehicle was determined to be a "total loss" by an insurance carrier.
Information from junk and salvage yards receiving a "cash for clunker" vehicle traded-in under the Consumer Assistance to Recycle and S
Information on automobiles, buses, trucks, motorcycles, vehicles, motor homes, and tractors. NMVTIS may not currently include commercial Norecreational problems found! Record of Odometer: May be Altered? (CARS) Program.
vehicles if those vehicles are not included in a state.s primary database (in some states, those vehicles are managed a separate No problems found! for title records Record of Odometer: Replaced? Consumers are advised to visit www.vehiclehistory.gov for details by on how to interpretstate the information in the system and understand the me agency), although records may be added at a later No time. problems found! Record of Odometer: Reading at Timethese of Renewal?
labels applied to vehicles by the participating state motor vehicle titling agencies.
No problems found! Record of Odometer: Call Title Division? provide useful information about the condition or prior use of the vehicle.
VinAudit.com Disclaimer
Information on "brands" applied to vehicles provided byNo participating state motor vehicle titling agencies. Brand types and definitions vary by state, but may problems found! Record of Odometer: Discrepancy? Most recent odometer reading in the state's title record.
The title records, junk/salvage/insurance records, and reported vehicle brands listed in the "Problem Check" section is compiled from data
This vehicle history data is passed from our connection with AAMVA to our servers, which serves this report to your browser. This process
Information from insurance companies, and auto recyclers, including junk and salvage yards, that is required by law to be reported to the system, report through our connection with NMVTIS has been tested and approved by AAMVA. However, VinAudit.com neither enters nor validate beginning March 31, 2009. This information will include if the vehicle was determined to be so a VinAudit.com "total loss"does by an NMVTIS, not insurance guarantee thecarrier. accuracy or completeness of the data presented.
The vehicle specifications presented are based ontoa Recycle decoding the VINSave numberAct (which statically identifies the vehicle's manufacturer and d Information from junk and salvage yards receiving a "cash for clunker" vehicle traded-in under the Consumer Assistance and of 2009
Hence, it will not reflect specific modifications made to this particular vehicle over the course of its existence. Furthermore, the accuracy of
(CARS) Program.
not guaranteed.
Consumers are advised to visit www.vehiclehistory.gov for details on how to interpret the information in the system and understand the meaning of various labels applied to vehicles by the participating state motor vehicle titling agencies.
Generate
VinAudit.com Disclaimer
The title records, junk/salvage/insurance records, and reported vehicle brands listed in the "Problem Check" section is compiled from data in NMVTIS.
This vehicle history data is passed from our connection with AAMVA to our servers, which serves this report to your browser. This process of compiling the report through our connection with NMVTIS has been tested and approved by AAMVA. However, VinAudit.com neither enters nor validates the data in NMVTIS, so VinAudit.com does not guarantee the accuracy or completeness of the data presented.
The vehicle specifications presented are based on a decoding the VIN number (which statically identifies the vehicle's manufacturer and description).
Hence, it will not reflect specific modifications made to this particular vehicle over the course of its existence. Furthermore, the accuracy of this decoding is not guaranteed.
Generated by December 2015
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feature OCCC Regulatory Activities Report by Rudy Aguilar
Director of Consumer Protection, OCCC
T
he Office of Consumer Credit Commissioner closed its fiscal year 2015 regulatory activities on August 31, 2015. Fiscal year-end results show moderate improvements in the compliance level of the motor vehicle sales finance industry from previous years. During fiscal year 2015, the agency conducted 1,565 motor vehicle sales finance examinations, of which 81.79% demonstrated an acceptable level of compliance. Of the 1274 examinations conducted in the previous year, 72.45% demonstrated an acceptable level of compliance. The agency had $6,505,278.28 in monetary restitution by motor vehicle sales finance licensees for fiscal year 2015. Agency staff members conducted presentations with the TxDMV dealer training seminar to the motor vehicle sales finance industry in addition to conducting training seminars at other events with local associations. In the past fiscal year, our agency has continued to provide ongoing examiner training in motor vehicle sales finance regulation to enhance the understanding and effectiveness of our examination team. The agency is committed to providing learning situations for licensees during the examination process when appropriate. The combination of these factors has contributed to the improvement of the compliance level for the motor vehicle sales finance industry. The agency conducted 87 investigation reviews in all license types; however, 42 of these investigations were in the motor vehicle sales finance area. The majority of the
investigations were in the category of unlicensed motor vehicle sales finance activity. In addition, the largest area of the complaints received in our office is from the motor vehicle sales finance industry. Consumer Assistance December 2015
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Some of the major issues examiners continue to come across include Documentary Fee, Disclosure of Equity in Retail Buyer’s Tradein Motor Vehicle, and, Dealer Preparation Fee. processed 2,131 complaints of which 982 were in the motor vehicle sales finance area. Significant issues are still prevalent in motor vehicle sales finance examinations. Some of the major issues examiners continue to come across include Documentary Fee, Disclosure of Equity in Retail Buyer’s Trade-in Motor Vehicle, and, Dealer Preparation Fee. These issues are discussed in more detail below:
DOCUMENTARY FEE
Examiners continue to find that one or all of the requirements to increase the documentary fee have not been satisfied. Some dealers have failed to make the proper filing to increase the documentary fee as required with the OCCC, resulting in the dealers having to provide restitution to the retail buyer for any amount of the fee in excess of $50, to pay administrative penalties, or both. Dealers licensed by the OCCC are permitted to charge documentary fees in excess of $50 only if the dealer (1) provides written notice (thru the prescribed electronic system) to the OCCC of the maximum amount of the documentary fee intended to be charged; (2) obtains a compliant buyer’s order/purchase order and retail installment contract that includes the new documentary fee notice; and (3) posts the prescribed documentary fee statement in each place where a vehicle sale is finalized so that it is clearly visible to the retail buyer. Documentary fees at or below $125 are considered reasonable by rule, after written notice has been provided. The agency will request additional financial 35
information from a dealer to determine reasonableness for documentary fees above $125.
DEALER PREPARATION FEE
Examiners are finding that dealers are not properly documenting dealer preparation charges correctly. Dealer preparation charges are authorized in instances where the dealer preparation charge is (1) included as a component of the cash price of the vehicle; (2) considered a price of services related to the sale; and (3) equally assessed, charged, and collected on both cash and credit transactions. A motor vehicle dealer can assess, charge, and collect a “dealer preparation charge” and charge sales tax on the dealer preparation charge. The legal authority to assess, charge, and collect the dealer preparation charge in the cash price of the motor vehicle is found under Section 348.004(c)(2) of the Texas Finance Code. This provision indicates at the retail seller’s option, the cash price may include the price of services related to the sale. The dealer preparation charge CANNOT be shown as an itemized charge on the motor vehicle retail installment contract. In respect to the taxation issue, the dealer preparation charge can be included in the cash price of motor vehicle (a.k.a. “selling price”). According to the Texas Comptroller
of Public Accounts, the “Selling Price” of a motor vehicle for taxation purposes must include the following items: the cost of the motor vehicle, the cost of materials, labor, service, interest, loss, or any other expense (“Dealer Prep”), the cost of transportation of the motor vehicle prior to its sale or purchase, and any manufacturer’s or importer’s excise tax im posed on the motor vehicle by the United States.
DISCLOSURE OF EQUITY IN RETAIL BUYER’S TRADE-IN MOTOR VEHICLE
A dealer (retail seller) must provide a standard form for the disclosure of equity to the retail buyer before accepting a trade-in motor vehicle for an ordinary motor vehicle sold under a retail installment sales contract. This form is not required for transactions where a single cash payment is made for the sale of the motor vehicle. The requirement to disclose the equity in a trade-in motor vehicle including the required elements is provided in Texas Finance Code §348.0091. The disclosure form must fit on one standard-size 8 ½ X 11 sheet of paper. Examiners have found that dealers are not complying with providing the disclosure equity to a retail buyer when a trade-in motor vehicle is accepted under a retail installment contract. The disclosure of equity form must be maintained in the retail installment transaction file of the customer. The trade-in equity form has a specific purpose and required elements as prescribed in 7 Texas Administrative Code §84.204. On the opposite page is a copy of the disclosure of equity form Figure: 7 TAC §84.204(h).
FINAL THOUGHTS
Examination reports that contain a “Special Instructions” section in the report require the licensee to complete specific actions. Dealers are responsible for complying with these instructions within the annotated follow-up deadline. We ask that licensees contact the Office when they have completed the actions. Depending on the specific situation the licensee may be asked to forward the documentation or to hold them for review in a follow-up examination. Regardless the licensee should maintain copies all documents pertaining to compliance of the “Special Instructions” at their location. Reviewing your procedures and records periodically to ensure they are current and compliant with existing regulations are the responsibility of the dealer and licensee. These proactive measures can limit your risk and exposure to private remedies from threatened litigation and may reduce the use of significant resources and monies to address examination or investigation issues.
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Texas Disclosure of Equity in Trade-in Motor Vehicle The information below is valid as of ______________________________________ (date) and after this date is no longer valid. Name of Buyer(s)
Trade-in Make / Model / Year
Date
VIN#
Dealership Allowance for Trade-in
$
Amount Owed on Trade-in
$
Equity Amount
$
Equity:
*If the EQUITY amount is NEGATIVE, the value the dealer is offering for your trade-in is less than what you currently owe on your trade-in. The amount of negative equity may be further reduced by the amount of any cash downpayment and manufacturer’s rebate and may be included in the Amount Financed under your retail installment contract as an itemized charge.
q POSITIVE q NEGATIVE
Cash Price of Vehicle
$
Amount Financed
$
Buyer(s) Signature(s)
Date
____________________________________
_____________
____________________________________
_____________
Dealer’s Signature ____________________________________
Date _____________
Dealer’s Printed Name ____________________________________ Name of Dealership ____________________________________________________________________________ Street Address ________________________________________________________________________________ City, State, Zip ________________________________________________________________________________ Telephone No. ________________________________________________________________________________
December 2015
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Special Thanks to our
2015 INDEPAC Contributors Bob and Erika Blankenship Brad Davis Tommy Gregory Mark G. Jones Mike Carlson Roy Carlson Steven Dayton Keith Hagler Blake Ingram
$2,000 +
$1,000 -$1,999 Ted Lyon Somir Paul Greg Reine Juan Sabillon Gary Sayre
Phil Lathrop Brent Rhodes Gregory Zak
Paul Scott Michael Thomasson James Wood
$500-$999 Scott Allen Kenny Allison Paul Barnes Jody Bettis James Blackburn
Henry Joe Drapela Eddie Hale Christopher Kirwan Rick Maroney Jeff Martin
Jim Silva Barry Smith Jerry Smith John M. Minter Ryan Winkelmann
$250-$499 Jeff Atchison Steve Babinsky Marjorie Barnes Mark Bearden Justin Browning Victor Caldwell Jim Campbell
Steve Chapman Michael Charman Joe & Connie Chick John Coward George Dodd Larry & Patricia Dziuk Haskell Griffin
Jennifer Kitchens Kanton Labaj Wayne Meagher Loy E. Moore Sonny Paredez Gary Rhodes Evan Swinford
$100-$249 Gary Bostick Mark Brown Kyle Chapman Butch Cornelius Debra Flanagan Greg Galier Melvin Gilmore December 2015
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Carleton Heller Buddy Johnson Patricia Kannel Chris Knox Danny Langfield Manuel Magana Ray McEachern
Allison Pair James Rashby Byron Riley Kathrine Tolsch Ghulam Warriach
39
feature Maximum Finance Charge Rates for 2016 by Michael W. Dunagan TIADA General Counsel
Dealer Question: What is the maximum finance charge rate I can use on a motor vehicle retail installment contract? Answer: Dealers who hold vehicle finance licenses issued by the Office of Consumer Credit Commissioner (OCCC) are authorized to finance the sale of vehicles, and are allowed to add finance charge or time-price-differential to the amount financed (while the term “interest” is commonly used interchangeably with finance charge and time-price-differential, “interest” actually is the amount charged on a loan of money, and should not technically be used in the context of financing the sale of a motor vehicle).
T
he legislature has established a sliding scale of maximum rates, with higher rates allowed on older cars. The maximum rate that sellers of older vehicles can add to the amount financed is $15 per $100 per annum or, stated another way, 15 per cent add on (see accompanying chart). Depending on such variables as the length of the repayment period, the amount of each payment, and the frequency of payment (weekly, biweekly, semi-monthly or monthly), the annual percentage rate on 15 per cent add on can exceed 26 per cent. Chapter 348 of the Texas Finance Code allows sellers of vehicles to finance any unpaid balance at rates that generally exceed the rates of interest that can be legally charged by banks and traditional lenders. For purposes of setting maximum rates of finance charge, Chapter 348 establishes four classes of vehicles based of the vehicle’s model year. The attached chart shows allowable rates for calendar year 2016. These rates are valid on sales that take place between January 1, 2016, and December 31, 2016. The maximum rates “roll over” on January 1 of each year.
The maximum rates of finance charges are stated in the Finance Code as “add-on” rates. For example, for vehicles that fall into the class-four category, sellers can charge fifteen dollars per one hundred dollars financed per annum. (“Add-on” should not be confused with “annual percentage rate” which is the rate required to be disclosed by federal law.) These are maximum rates, and any rate lower than the maximum can be charged. All financing sellers, with a few exceptions, are required by federal law to disclose the rate of finance charge as an annual percentage rate, or APR, on their contracts. Since Texas law sets maximum rates as add-on rates, it is necessary to first calculate the amount of finance charge the creditor wishes to assess within the legal limit, then determine the APR for disclosure purposes. Federal Truth-InLending requires that any finance charge rate be advertised or expressed to a consumer as an APR. It is thus improper to advertise or discuss add-on rates with customers. The process of calculating the APR on contracts that provide for payments other than equal monthly payments is extremely difficult. Most creditors rely on specialized software to perform this function. (For a list of reviewed programs, see the OCCC website at http://www.occc.state.tx.us/). Without appropriate software, it is virtually impossible for a creditor who collects weekly, bi-weekly, or semimonthly payments to accurately calculate an APR and other required disclosures. Dealers should not guess at or estimate an APR as incorrect disclosures are the basis for claims for statutory damages and attorneys fees. Note that the chart also includes a column for what is referred to as an “Alternate Rate.” This rate is 18 per cent APR for all four classes. Many dealers have questioned what the alternate rate is, and how it affects the rates they can charge.
Maximum Finance Charge Rates for Calendar Year 2016 Class One Two Three Four 40
Year Models
2017 and 2018 new Any new note appearing in Class One above; 2016, 2015 and 2014 used 2013 and 2012 2011 and older
Max. Rate
Alternate Rate
7.5 per cent add on 10 per cent add on
18 per cent APR 18 per cent APR
12.5 per cent add on 15 per cent add on
18 per cent APR 18 per cent APR T e x a s
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December 2015
The alternate rate is an optional rate. A dealer has the option to use either the standard or alternate rate. As an example, a dealer financing the sale of a 2009 model- year vehicle can charge up to 15 per cent addon (since this year model falls into Class Four) or the alternative rate of 18 per cent A.P.R. Since the 15 per cent add-on rate translates to over 26 per cent A.P.R. on a typical weekly payment contract, a higher legal return can be achieved using the standard rate than the alternative rate. On the other hand, the sale of a class-two vehicle would be subject to a 10 per cent add-on maximum. Since the actual yield on 10 per cent add-on would be lower than 18 per cent, the alternative rate would allow the seller a higher legal return. Remember that the so-called “add-on rate,” which is the rate used to calculate the finance charge added to a contract, can’t be used on the contract documents or in any communication with consumers. In order that credit consumers can shop rates on an “apples to apples” basis, federal law requires all discussions about rates to refer to the chosen universal rate, or the A.P.R. It would be improper to have an add-on rate appear anywhere on a contract.
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877-281-2360 December 2015
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e-Tag Supplies —
In Stock for Immediate Shipment!
MOTO
R VEH
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ETAIL
INSTAL
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SALES
REDITOR SELLER/C : ADDRESS ZIP: CITY, ST,
CONTR
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purchased. vehicle being the motor interest in NT(S ) a security NPA YME Due I give you Date ED DOW owe you, DEF ERR or in the future charge of owe you Amount a late debt I now I will pay any other it is due, ses in it and days after my promi ct and all within 15 payment Charge. on this contra ce sts, owe entire I all ve my of the Finan lt, security intere p this To secure d of part do not recei Security: defau (1)Kee writing. get a refun t nonpayment, ge: If you ises in paym ent. so, I can NO.: Late Char n abou $ all prom sched uled . If I do ds. STOCK put....... informatio % of the er to........ I owe early yment refun ment for deal........ the ........ and prepa pay all that refer to this docu Ask........ rce. ........ nt: I can uled date, I will ............... DATE: to enfo Prepayme l Information: e the sched cult........ REDITOR: diffi........ full befor are........ SELLER/C ises........ Additiona repayment in .$ D prom........ ER : red ................ ................ FINANCE : Spo VIN NUMB ces) ken ADDRESS any requi servi ................ ANT AMO UNT ... $ ORT s, and ................ IMP sorie , ST, ZIP: ION OF ................ ........ acces CITY IZAT ........ ITEM YEAR ................ uding any ................ form. ........ER: ..$ e) ........ ........BUY PHONE: price: (Incl Color: ................ (2) R:abov box 1. Cash ................ UYE L .............. ment follow ing: CO-B(s) ment ....$ ................ MODE........ fied, the Downpay ................ 2. 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TIES FOR -in (if nega ................ part of these No.: ........ ........ trade ........ keep Stock er may = net ............... .$ ................ WARsRAN ................ lf (Sell ................ payment ................ minu 2) my beha price (1 ................ ................ Total down others on of cash ............$ ................ ................ paid to .: balance ss ................ ................ V.I.Nany.................. amounts 3. Unpaid y) ........ regardle company.. including ance ance comp Services tive equit repairs charges insurs, r and insur to any (nega to Othe $ ff 4. ... y for paid payo ance paid Accessorie insur trade-in onsibilit insurance Options,or companies damage A. Net $ damage no resp ...mes physical TOTAL company of physical er assu $ rages with CE $ insurance B. Cost ... nal cove . The deal paid to CASH PRI of optio REPAIRS t insur ance C. 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IftheSellerperformts,andothercharges. ssed) ess: ................ zed Char zed Char . ge is Asse Addr ........................ ................ contrac mentagency. Plus Itemi Total Itemi ce Char ................ athirdpartyorgovern oftheinsurance,service Balance $ TAL ................ h No Finan Unpaid ................ Seller to SUB-TO than $ retainparts ................ 5. Total insurer By: (Upon Whic ................tion fee will be paid by theSellermayalso nt not more have. The ................ Quoted loss. Sales Tax ................ inspec Seller and I already damage ornot been ctible amou 6. Total (5 + 6) ........ ered of has Sales Tax) agencies. Any statefee will be retained by $ of insura in:nce with a dedu Financed e proof trade ment in the eventtime andATION OF Cash Tend ssed Upon service : nt I owe, or provid to any 7. Amount the policy ing at this (Not Asse paid by Seller to govern fee and deputy Good Until e I want regaberdpaid under in the amou TO entary anyon has not eter is workTHE ITEMIZ andSED Charge with will be ge or loss nce from ants CAU IN 8. Financefee, and license fee inspection fee. Docum person to . The odom company st dama DUE $ the rty anceAGE and warr ts insura ED prope youis as ed again insur stated aboveINCLUDED byTY ge. DAM as TOTAL an esen name obtain insur Taxes, title retain $7.00 of each dama ge le repr may r FINANC IS teral PER ed to flood airab will ct. Ihase ed nce. I mustl milea the colla PRO Purc or unrep the Seller this contra expos law, You rty insura and actua INSURANCE loss AND byfigur I must keep Rate. ired a total not been owe under proof of prope URY 1. The trueBIL H SALE to red ntage ctnot INJ RANCE: not requce CAS and has ced. 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resource guide The TIADA Website:
www.txiada.com Members can log in with their username/password and access our Dealer Member Directory, Legislative Action Center, Legal Consultation Service and much more. Register for all upcoming TIADA events online at the Calendar of Events; access our online membership application; find contact information for all our Local Chapters, and find many additional resources at our Links page. Texas Department of Motor Vehicles 888.368.4689 www.txdmv.gov Office of Consumer Credit Commissioner 800.538.1579 www.occc.state.tx.us
Texas Comptroller 800.252.1382 www.window.state.tx.us NIADA 800.682.3837 www.niada.com
REPOSSESSIONS
American Recovery Association 972.755.4755 www.repo.org or contact TIADA state office
FORMS
Burrell Printing 800.252.9154 www.burrellprinting.com
LUBBOCK
Auction Listings
Lone Star Auto Auction www.lsaalubbock.com
2706 Slaton Hwy Lubbock, TX 79404 806.745.6606 , Toll-Free 888.299.6606 General Manager: Dale Martin Wednesday, 10:00 a.m.
LUFKIN Lufkin Dealers Auto Auction
2109 N. John Reddit Drive Lufkin, TX 75904 936.632.4299 General Manager: Wayne Cook Thursday, 6:00 p.m.
TYLER Greater Tyler Auto Auction
11654 State Higway 64 W Tyler, TX 75704 903.597.2800 General Manager: Wayne Cook Tuesday, 5:00 p.m. – Repo Lane Tuesday, 6:00 p.m. – Consignment
December 2015
T e x a s
D e a l e r
Local Chapters VICTORIA Dennis Schroller Victoria Autos Direct 361.578.0530 Dennis@victoriaautosdirect.com Meeting – 1st Monday (Monthly) FORT WORTH Jerry Smith HJ Smith Automobiles 817.282.0102 hjsmithauto@yahoo.com Meeting- 4th Thursday of December, February, April, June, August and October DALLAS COUNTY Kevin Mims VP Auto Sales 972.864.1300 kevinm@vpautosales.com Meetings as needed/TBD HOUSTON Michael Zak Dixon Motors 281.931.1300 houiada@houiada.com Meeting – 2nd Monday (Monthly) SAN ANTONIO Robert Beck Stop N’ Drive Motors 210.432.1101 stopdrive@texas.net Meetings quarterly (dates announced at www.txiada.com) EL PASO Ricardo Gardea Cars Plus 915.778.8285 cars_plus@att.net Meeting – 3rd Friday (Monthly) 43
Answers to the 2015 Annual Compliance Quiz 1. b. There is no minimum amount of loss that triggers the liability carrier’s obligation to include a registered lien holder on the settlement check. (January, 2015; Law Protects Lienholders in Liability Insurance Claims) 2. False. If a dealer charges a doc fee in excess of $50, s/he must notify the OCCC. Separate notification is required for each dealership location. (January, 2015; Doc Fee: Second Verse, Same as the First) 3. False. A dealer is required to transfer all sales. The only exception is a “no sale” where all consideration paid is refunded and any payment obligation cancelled. (February, 2015; Timely Transfer of Titles Requires Diligence) 4. c. Under federal law, notice must be attached to the left door frame of the vehicle. (February, 2015; A Few Quick Hitters) 5. c. The Texas statutory provision for such a court order is “sequestration.” (March, 2015; Obtaining Court Orders To Enforce Liens) 6. True. As long as the dealer actually pays for the inspection and retains the receipt, the cost of a vehicle inspection may be passed through to the customer. (March 2015; The “Single Sticker” Dealer Dance: Fees, Contracts, TT&L) 7. b. Texas law provides that the tender of all required forms, documents, and payment to the County Tax Office establishes perfection. (April 2015; Dropped Liens Are Disastrous, But Avoidable) 8. False. A dealer may register a vehicle as long as it has a current, passing inspection. “Current” means at least one full month remaining at the time the paperwork is submitted to the county. NOTE: Stay tuned; this will change on March 1, 2016. Renew your TIADA membership so we can keep you up to date. (April 2015; Single Sticker Meets the Real World) 9. False. In fact, Texas law requires dealers to handle the transfer. It is a violation to turn over transfer papers to the customer to be filed (except qualifying out-ofstate transfers). Prior to passage of the deferred sales tax law, dealers were actually handing over titles to avoid being liable for the entire amount of sales tax due at transfer. (June, 2015; Jim Watson: Father of Deferred Sales Tax) 10. b. A VSF lien is indeed superior. Almost all other storage liens are inferior and therefore require a release of lien from the car creditor. (May 2015; Storage Charges: The Never Ending Story) 44
(questions found on pg. 18)
11. True. A Related Finance Company has to be a separate entity to qualify for federal income tax benefits. An RFC is required to have an OCCC Vehicle Finance License since it owns and services motor vehicle installment contracts. Because it is a separate entity from the dealership it needs its own OCCC license. (July, 2015; OCCC Audits Spur Review of Compliance Procedures) 12. d. Any change in your business form comes with potential complications and should be undertaken with professional advice. (June 2015; A Cautionary Tale About Changing Your Business Entity) 13. e. Notice of bankruptcy filing can take any form. Courts will hold creditors to the terms of the automatic bankruptcy stay if they have gotten any type of notice. (September, 2015; Bankruptcy Basics for Car Creditors: Separating Fact from Fiction) 14. d. If you missed this one, reading the entire source article is your best bet. (July 2015; Takata Issue Brings Recalls to Forefront) 15. False. While a car creditor can reject a “nameddriver- only” policy or an “excluded- driver” policy, a short-term policy written by a licensed insurance company can’t be rejected. (November, 2015; Chasing Property Damage Insurance: A Broken Model) 16. False. The buy-back order does apply to vehicles held by independent dealers. (September 2015; Do You Recall?) 17. e. The Texas Finance Code specifically provides that one of these two items triggers debt cancellation under a DCA. (December, 2015; Alternatives to Traditional Property-Damage Insurance Offer Options to Dealers) 18. b. The “white” non-secure POA is not required in the deal jacket. In fact, the white POA may not be assigned to a dealer or an employee or relative of the dealer. (October 2015; The Deal Jacket) 19. b. Installment sellers (including BHPH dealers) are required to use the accrual method. (October, 2015; Dealers’ Check List: Things You Can Fix Right Now) 20. False. Sorry but Obama can’t be blamed on this one. The study is true but it suggests that the surge in safety recalls and rising prices are the primary driving forces behind consumers’ increasing disgruntlement. (November 2015; VW Diesel Emissions Fiasco Keeps Recalls Front and Center)
T e x a s
D e a l e r
December 2015
behind the wheel
Martin
What to Do
I
don’t know about you, but I live and die by my “To Do List.” I like to think I am organized enough that I don’t need to write down simple tasks on a piece of paper to remind me to actually do the task. But almost every Friday before I leave work I scribble out some reminders on a yellow notepad. I even go so far as to draw a box to the left of the note so I can check the box when the task is complete. I know people who use the fancy “task” option on their computer. This allows the reminders to pop up throughout the week on their phone. I tried that but it was too easy to delete and forget about it so I still opt for words written after a little square box to keep me organized. Last Friday my list read: q Email committee members q Follow-up on 2016 VIP auction card q Meet with TxDMV board chair Laura Ryan q Attend Rep. Oliveira’s fundraiser in Brownsville q Meet with Comptroller on RFC issue q Prep Phil for Washington DC meeting with CFPB q Close FY’15 and file IRS form 990 q Review FY’16 budget amendments with all staff q Sign contract for association new website q Write Behind the Wheel column
by Jeff
TIADA EXECUTIVE DIRECTOR
My check list is usually made up of those tasks that I don’t do every week and that I feel are most important to the association. I wouldn’t want to miss a meeting with Rep. Oliveira or the TxDMV Chair. That would not only reflect poorly on me, it would create a negative image of our association and our industry. We only print the Auction VIP Card once a year and I know how important that card is to you. I want to make sure we are able to provide even more savings next year. I’m not sure what method you use to remind yourself of important things to do. Maybe you have a “To Do List” like me, or you have mastered the electronic calendar. Maybe you tell your spouse or coworker to remind you, or you tie a string around your finger. Whatever it is, make sure you use it and remember to renew your membership. Last month you received your membership renewal notice via email. Don’t move it to another folder. Don’t decide you will do it later. Renew today! Your membership will expire on January 1 if you do not renew. Not only will you lose the free legal consultation, you will miss out on your VIP Auction Card and more importantly, we will not be as effective. To effectively represent you, we need you. When we sit at the table with the policy makers to represent your interests we are always asked, “How many dealers do you represent now?” Your membership makes the association powerful — it makes you powerful.
Last month you received your membership renewal notice via email. Don’t move it to another folder. Don’t decide you will do it later. Renew today! 46
T e x a s
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December 2015
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913.396.5480
*Substantial Discounts for TIADA Members
TEXAS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION 9951 Anderson Mill Rd., Suite 101 Austin, TX 78750
PRSRT STD
U.S. POSTAGE
PA I D JEFFERSON CITY, MO
PERMIT NO. 210